Subd. 2. Standard of assistance for persons eligible
for medical assistance waivers or at risk of placement in a group residential
housing facility. The state standard of assistance for a person who: (1)
is eligible for a medical assistance home and community-based services waiver or
a person who; (2) has been determined by the local agency to meet
the plan requirements for placement in a group residential housing facility
under section 256I.04, subdivision 1a,; or (3) is eligible for a
shelter needy payment under subdivision 5, paragraph (f), is the standard
established in subdivision 3, paragraph (a) or (b).

Subd. 5. Special needs. In addition to the state
standards of assistance established in subdivisions 1 to 4, payments are
allowed for the following special needs of recipients of Minnesota supplemental
aid who are not residents of a nursing home, a regional treatment center, or a
group residential housing facility.

(a) The county agency shall
pay a monthly allowance for medically prescribed diets if the cost of those
additional dietary needs cannot be met through some other maintenance benefit.
The need for special diets or dietary items must be prescribed by a licensed
physician. Costs for special diets shall be determined as percentages of the
allotment for a one-person household under the thrifty food plan as defined by
the United States Department of Agriculture. The types of diets and the
percentages of the thrifty food plan that are covered are as follows:

(b) Payment for nonrecurring
special needs must be allowed for necessary home repairs or necessary repairs
or replacement of household furniture and appliances using the payment standard
of the AFDC program in effect on July 16, 1996, for these expenses, as long as
other funding sources are not available.

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(c) A fee for
guardian or conservator service is allowed at a reasonable rate negotiated by
the county or approved by the court. This rate shall not exceed five percent of
the assistance unit's gross monthly income up to a maximum of $100 per month.
If the guardian or conservator is a member of the county agency staff, no fee
is allowed.

(d) The county agency shall
continue to pay a monthly allowance of $68 for restaurant meals for a person
who was receiving a restaurant meal allowance on June 1, 1990, and who eats two
or more meals in a restaurant daily. The allowance must continue until the
person has not received Minnesota supplemental aid for one full calendar month
or until the person's living arrangement changes and the person no longer meets
the criteria for the restaurant meal allowance, whichever occurs first.

(e) A fee of ten percent of
the recipient's gross income or $25, whichever is less, is allowed for
representative payee services provided by an agency that meets the requirements
under SSI regulations to charge a fee for representative payee services. This
special need is available to all recipients of Minnesota supplemental aid
regardless of their living arrangement.

(f) (1) Notwithstanding
the language in this subdivision, an amount equal to the maximum allotment
authorized by the federal Food Stamp Program for a single individual which is
in effect on the first day of January July of the previous
each year will be added to the standards of assistance established in
subdivisions 1 to 4 for individuals adults under the age of 65
who qualify as shelter needy and are: (i) relocating from an
institution, or an adult mental health residential treatment program under
section 256B.0622, and who are shelter needy; (ii) eligible for the
self-directed supports option as defined under section 256B.0657, subdivision
2; or (iii) home and community-based waiver recipients living in their own home
or rented or leased apartment which is not owned, operated, or controlled by a
provider of service not related by blood or marriage.

(2) Notwithstanding
subdivision 3, paragraph (c), an individual eligible for the shelter needy
benefit under this paragraph is considered a household of one. An eligible individual who
receives this benefit prior to age 65 may continue to receive the benefit after
the age of 65.

(3) "Shelter needy"
means that the assistance unit incurs monthly shelter costs that exceed 40
percent of the assistance unit's gross income before the application of this
special needs standard. "Gross income" for the purposes of this
section is the applicant's or recipient's income as defined in section 256D.35,
subdivision 10, or the standard specified in subdivision 3, paragraph (a) or
(b), whichever is greater. A recipient of a federal or state housing
subsidy, that limits shelter costs to a percentage of gross income, shall not
be considered shelter needy for purposes of this paragraph.

(a) The commissioner of human
services shall increase allocations, reimbursement rates, or rate limits, as
applicable, by 2.0 percent beginning October 1, 2007, and by 2.0 percent
beginning July October 1, 2008, effective for services rendered
on or after those dates. County contracts for services specified in this
section must be amended to pass through these rate adjustments within 60 days
of the effective date of the increase and must be retroactive from the
effective date of the rate adjustment.

(b) The annual rate
increases described in this section must be provided to:

(1) home and community-based
waivered services for persons with developmental disabilities or related
conditions, including consumer-directed community supports, under Minnesota
Statutes, section 256B.501;

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(2) home and
community-based waivered services for the elderly, including consumer-directed
community supports, under Minnesota Statutes, section 256B.0915;

(3) waivered services under
community alternatives for disabled individuals, including consumer-directed
community supports, under Minnesota Statutes, section 256B.49;

(9) day training and
habilitation services for adults with developmental disabilities or related
conditions under Minnesota Statutes, sections 252.40 to 252.46, including the
additional cost of rate adjustments on day training and habilitation services,
provided as a social service under Minnesota Statutes, section 256M.60;

(16) community support
services for deaf and hard-of-hearing adults with mental illness who use or
wish to use sign language as their primary means of communication under
Minnesota Statutes, section 256.01, subdivision 2; and deaf and hard-of-hearing
grants under Minnesota Statutes, sections 256C.233 and 256C.25; Laws 1985,
chapter 9, article 1; and Laws 1997, First Special Session chapter 5, section
20;

(17) living skills training
programs for persons with intractable epilepsy who need assistance in the
transition to independent living under Laws 1988, chapter 689;

(c) For services funded
through Minnesota disability health options, the rate increases under this
section apply to all medical assistance payments, including former group
residential housing supplementary rates under Minnesota Statutes, chapter 256I.

(d) The commissioner may
recoup payments made under this section from a provider that does not comply
with paragraphs (f) and (g).

(e) A managed care plan
receiving state payments for the services in this section must include these
increases in their payments to providers on a prospective basis, effective on
January 1 following the effective date of the rate increase.

(f) Providers that receive a
rate increase under this section shall use 75 percent of the additional revenue
to increase compensation-related costs for employees directly employed by the
program on or after the effective date of the rate adjustments, except:

(1) the administrator;

(2) persons employed in the central
office of a corporation or entity that has an ownership interest in the
provider or exercises control over the provider; and

(g) Two-thirds of the money
available under paragraph (f) must be used for wage increases for all employees
directly employed by the provider on or after the effective date of the rate
adjustments, except those listed in paragraph (f), clauses (1) to (3). The wage
adjustment that employees receive under this paragraph must be paid as an equal
hourly percentage wage increase for all eligible employees. All wage increases
under this paragraph must be effective on the same date. This paragraph shall
not apply to employees covered by a collective bargaining agreement.

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(h) For public
employees, the increase for wages and benefits for certain staff is available
and pay rates must be increased only to the extent that they comply with laws
governing public employees collective bargaining. Money received by a provider
for pay increases under this section may be used only for increases implemented
on or after the first day of the rate period in which the increase is available
and must not be used for increases implemented prior to that date.

(i) The commissioner shall
amend state grant contracts that include direct personnel-related grant
expenditures to include the allocation for the portion of the contract that is
employee compensation related. Grant contracts for compensation-related
services must be amended to pass through these adjustments within 60 days of
the effective date of the increase and must be retroactive to the effective
date of the rate adjustment.

(j) The Board on Aging and
its Area Agencies on Aging shall amend their grants that include direct
personnel-related grant expenditures to include the rate adjustment for the
portion of the grant that is employee compensation related. Grants for
compensation-related services must be amended to pass through these adjustments
within 60 days of the effective date of the increase and must be retroactive to
the effective date of the rate adjustment.

(k) The calendar year 2008
rate for vendors reimbursed under Minnesota Statutes, chapter 254B, shall be at
least 2.0 percent above the rate in effect on January 1, 2007. The calendar
year 2009 rate shall be at least 2.0 percent above the rate in effect on
January 1, 2008.

(l) Providers that receive a
rate adjustment under paragraph (a) that is subject to paragraphs (f) and (g)
shall provide to the commissioner, and those counties with whom they have a
contract, within six months after the effective date of each rate adjustment, a
letter, in a format specified by the commissioner, that provides assurances
that the provider has developed and implemented a compensation plan and
complied with paragraphs (f) and (g). The provider shall keep on file, and
produce for the commissioner or county upon request, its plan, which must
specify:

(1) an estimate of the
amounts of money that must be used as specified in paragraphs (f) and (g); and

(2) a detailed distribution
plan specifying the allowable compensation-related and wage increases the
provider will implement to use the funds available in clause (1).

(m) Within six months after
the effective date of each rate adjustment, the provider shall post this plan,
excluding the information required in paragraph (l), clause (1), for a period
of at least six weeks in an area of the provider's operation to which all
eligible employees have access and provide instructions for employees who
believe they have not received the wage and other compensation-related
increases specified in paragraph (l), clause (2). Instructions must include a
mailing address, e-mail address, and the telephone number that may be used by
the employee to contact the commissioner or the commissioner's representative.
Providers shall also make assurances to the commissioner and counties with whom
they have a contract that they have complied with the requirement in this
paragraph.

Sec. 18. MORATORIUM EXCEPTION PROPOSAL; WAIVER.

The commissioner of health
may waive the six-mile limit in Minnesota Statutes, section 144A.073,
subdivision 5, paragraph (e), when considering a moratorium exception proposal
submitted under Minnesota Statutes, section 144A.073, to allow a nursing
facility providing specialty care in Minneapolis to close and relocate beds to
a new facility in Robbinsdale under common ownership.

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Subdivision 1. Public assistance Definitions.
(a) The term "direct support" as used in this chapter and chapters
257, 518, 518A, and 518C refers to an assigned support payment from an obligor
which is paid directly to a recipient of TANF or MFIP public assistance.

(b) The term "public
assistance" as used in this chapter and chapters 257, 518, 518A, and 518C,
includes any form of assistance provided under the AFDC program formerly
codified in sections 256.72 to 256.87, MFIP and MFIP-R formerly codified under chapter
256, MFIP under chapter 256J, work first program formerly codified under
chapter 256K; child care assistance provided through the child care fund under
chapter 119B; any form of medical assistance under chapter 256B; MinnesotaCare
under chapter 256L; and foster care as provided under title IV-E of the Social
Security Act.

(c) The term "child
support agency" as used in this section refers to the public authority
responsible for child support enforcement.

(d) The term "public
assistance agency" as used in this section refers to a public authority
providing public assistance to an individual.

(e) The terms "child
support" and "arrears" as used in this section have the meanings
provided in section 518A.26.

(f) The term
"maintenance" as used in this section has the meaning provided in
section 518.003.

Subd. 2. Assignment of support and maintenance
rights. (a) An individual receiving public assistance in the form of assistance
under any of the following programs: the AFDC program formerly codified in
sections 256.72 to 256.87, MFIP under chapter 256J, MFIP-R and MFIP formerly
codified under chapter 256, or work first program formerly codified under
chapter 256K is considered to have assigned to the state at the time of
application all rights to child support and maintenance from any other person
the applicant or recipient may have in the individual's own behalf or in the
behalf of any other family member for whom application for public assistance is
made. An assistance unit is ineligible for the Minnesota family investment
program unless the caregiver assigns all rights to child support and spousal
maintenance benefits according to this section.

(1) AnThe assignment
made according to this section is effective as to:

(i) any current child support
and current spousal maintenance; and.

(ii) any accrued child
support and spousal maintenance arrears.

(2) An assignment made after
September 30, 1997, is effective as to:

(i) any current child
support and current spousal maintenance;

(ii) any accrued child
support and spousal maintenance arrears collected before October 1, 2000, or
the date the individual terminates assistance, whichever is later; and

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(2) Any child support or maintenance
arrears that accrue while an individual is receiving public assistance in the
form of assistance under any of the programs listed in this paragraph are
permanently assigned to the state.

(3) The assignment of
current child support and current maintenance ends on the date the individual
ceases to receive or is no longer eligible to receive public assistance under
any of the programs listed in this paragraph.

(b) An individual receiving
public assistance in the form of medical assistance, including MinnesotaCare,
is considered to have assigned to the state at the time of application all
rights to medical support from any other person the individual may have in the
individual's own behalf or in the behalf of any other family member for whom
medical assistance is provided.

(1) An assignment made after
September 30, 1997, is effective as to any medical support accruing after the
date of medical assistance or MinnesotaCare eligibility.

(2) Any medical support
arrears that accrue while an individual is receiving public assistance in the
form of medical assistance, including MinnesotaCare, are permanently assigned
to the state.

(3) The assignment of
current medical support ends on the date the individual ceases to receive or is
no longer eligible to receive public assistance in the form of medical
assistance or MinnesotaCare.

(c) An individual receiving
public assistance in the form of child care assistance under the child care
fund pursuant to chapter 119B is considered to have assigned to the state at
the time of application all rights to child care support from any other person
the individual may have in the individual's own behalf or in the behalf of any
other family member for whom child care assistance is provided.

An(1) The assignment made
according to this paragraph is effective as to:

(1) any current child care
support and any child care support arrears assigned and accruing after July
1, 1997, that are collected before October 1, 2000; and.

(2) any accrued child
care support arrears collected under federal tax intercept. Any child
care support arrears that accrue while an individual is receiving public
assistance in the form of child care assistance under the child care fund in
chapter 119B are permanently assigned to the state.

(3) The assignment of
current child care support ends on the date the individual ceases to receive or
is no longer eligible to receive public assistance in the form of child care
assistance under the child care fund under chapter 119B.

Subd. 2a. Families-first Distribution of child
support arrearages.(a) The state shall distribute current child
support and maintenance received by the state to an individual who assigns the
right to that support under subdivision 2, paragraph (a).

(b) When the public authority
collects child support arrearages on behalf of an individual who is
receiving public assistance provided under MFIP or MFIP-R under this
chapter, MFIP under chapter 256J, or work first under chapter 256K, and the
public authority has the option of applying the collection to arrears
permanently assigned to the state or to arrears temporarily assigned to the
state, the public authority shall first apply the collection to satisfy
those arrears that are permanently assigned to the state.

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(c) When the
public authority collects child support arrearages on behalf of an individual
who is not receiving public assistance, the public authority shall first apply
the collection to satisfy those arrears that are not permanently assigned to
the state.

(d) When the public
authority collects child support arrearages certified under the federal tax
offset, the public authority shall first apply the collection to satisfy those
arrears that are permanently assigned to the state.

Subd. 3. Existing assignments. Assignments based
on the receipt of public assistance in existence prior to July 1, 1997, are
permanently assigned to the state. Arrears that accrued prior to the receipt
of assistance that were assigned to the state between July 1, 1997, and October
1, 2009, must no longer be assigned as of October 1, 2009.

(a) Effective October 1,
2009, upon exiting the diversionary work program (DWP) or upon terminating MFIP
cash assistancethe Minnesota family investment program with
earnings, a participant who is employed may be eligible for transitional
assistancework participation cash benefits of $75 per month to
assist in meeting the family's basic needs as the participant continues to move
toward self-sufficiency.

(b) To be eligible for a
transitional assistance payment work participation cash benefits,
the participant shall not receive MFIP cash assistance or diversionary
work program assistance during the month and the participant or participants
must meet the following work requirements:

(1) if the participant is a
single caregiver and has a child under six years of age, the participant must
be employed at least 87 hours per month;

(2) if the participant is a
single caregiver and does not have a child under six years of age, the
participant must be employed at least 130 hours per month; or

(3) if the household is a
two-parent family, at least one of the parents must be employed an average of
at least 130 hours per month.

Whenever a participant exits
the diversionary work program or is terminated from MFIP cash assistance
and meets the other criteria in this section, transitional assistance iswork participation cash benefits are available for up to 24 consecutive
months.

(c) Expenditures on the program
are maintenance of effort state funds for participants under paragraph (b),
clauses (1) and (2). Expenditures for participants under paragraph (b), clause
(3), are nonmaintenance of effort funds. Months in which a participant receives
transitional assistancework participation cash benefits under
this section do not count toward the participant's MFIP 60-month time limit.

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Sec. 6. Minnesota
Statutes 2006, section 518A.50, is amended to read:

518A.50 PAYMENT TO PUBLIC AGENCY.

(a) This section applies to
all proceedings involving a support order, including, but not limited to, a
support order establishing an order for past support or reimbursement of public
assistance.

(b) The court shall direct
that all payments ordered for maintenance or support be made to the public
authority responsible for child support enforcement so long as the obligee is
receiving or has applied for public assistance, or has applied for child support
or maintenance collection services. Public authorities responsible for child
support enforcement may act on behalf of other public authorities responsible
for child support enforcement, including the authority to represent the legal
interests of or execute documents on behalf of the other public authority in
connection with the establishment, enforcement, and collection of child
support, maintenance, or medical support, and collection on judgments.

(c) Payments made to the
public authority other than payments under section 518A.53 must be
credited as of the date the payment is received by the central collections unit.,
except that payments made under section 518A.53 may be considered to have been
paid as of the date the obligor received the remainder of the income.

(d) Monthly amounts received
by the public agency responsible for child support enforcement from the obligor
that are greater than the monthly amount of public assistance granted to the
obligee must be remitted to the obligee.

Subd. 5. Payor of funds responsibilities. (a) An
order for or notice of withholding is binding on a payor of funds upon receipt.
Withholding must begin no later than the first pay period that occurs after 14
days following the date of receipt of the order for or notice of withholding.
In the case of a financial institution, preauthorized transfers must occur in
accordance with a court-ordered payment schedule.

(b) A payor of funds shall
withhold from the income payable to the obligor the amount specified in the
order or notice of withholding and amounts specified under subdivisions 6 and 9
and shall remit the amounts withheld to the public authority within seven
business days of the date the obligor is paid the remainder of the income. The
payor of funds shall include with the remittance the Social Security number of
the obligor, the case type indicator as provided by the public authority and
the date the obligor is paid the remainder of the income. The obligor is
considered to have paid the amount withheld as of the date the obligor received
the remainder of the income. A payor of funds may combine all amounts
withheld from one pay period into one payment to each public authority, but
shall separately identify each obligor making payment.

(c) A payor of funds shall
not discharge, or refuse to hire, or otherwise discipline an employee as a
result of wage or salary withholding authorized by this section. A payor of
funds shall be liable to the obligee for any amounts required to be withheld. A
payor of funds that fails to withhold or transfer funds in accordance with this
section is also liable to the obligee for interest on the funds at the rate
applicable to judgments under section 549.09, computed from the date the funds
were required to be withheld or transferred. A payor of funds is liable for
reasonable attorney fees of the obligee or public authority incurred in
enforcing the liability under this paragraph. A payor of funds that has failed
to comply with the requirements of this section is subject to contempt
sanctions under section 518A.73. If the payor of funds is an employer or
independent contractor and violates this subdivision, a court may award the
obligor twice the wages lost as a result of this violation. If a court finds a
payor of funds violated this subdivision, the court shall impose a civil fine
of not less than $500. The liabilities in this paragraph apply to intentional
noncompliance with this section.

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(d) If a single
employee is subject to multiple withholding orders or multiple notices of
withholding for the support of more than one child, the payor of funds shall
comply with all of the orders or notices to the extent that the total amount
withheld from the obligor's income does not exceed the limits imposed under the
Consumer Credit Protection Act, United States Code, title 15, section 1673(b),
giving priority to amounts designated in each order or notice as current
support as follows:

(1) if the total of the
amounts designated in the orders for or notices of withholding as current
support exceeds the amount available for income withholding, the payor of funds
shall allocate to each order or notice an amount for current support equal to
the amount designated in that order or notice as current support, divided by
the total of the amounts designated in the orders or notices as current support,
multiplied by the amount of the income available for income withholding; and

(2) if the total of the
amounts designated in the orders for or notices of withholding as current
support does not exceed the amount available for income withholding, the payor
of funds shall pay the amounts designated as current support, and shall
allocate to each order or notice an amount for past due support, equal to the
amount designated in that order or notice as past due support, divided by the
total of the amounts designated in the orders or notices as past due support,
multiplied by the amount of income remaining available for income withholding
after the payment of current support.

(e) When an order for or
notice of withholding is in effect and the obligor's employment is terminated,
the obligor and the payor of funds shall notify the public authority of the
termination within ten days of the termination date. The termination notice
shall include the obligor's home address and the name and address of the
obligor's new payor of funds, if known.

(f) A payor of funds may
deduct one dollar from the obligor's remaining salary for each payment made
pursuant to an order for or notice of withholding under this section to cover
the expenses of withholding.

Subdivision 1.Health Care Access Fund Transfer.On June 30, 2009, the
commissioner of finance shall transfer $50,000,000 from the health care access
fund to the general fund.

Subd. 2.Projected spending baseline.(a) By June 1, 2009, the
commissioner of health shall calculate the annual projected total private and
public health care spending for residents of this state and establish a health
care spending baseline, beginning for calendar year 2008 and for the next ten
years based on the annual projected growth in spending.

(b) In establishing the
health care spending baseline, the commissioner shall use the Centers for
Medicare and Medicaid Services forecast for total growth in national health
care expenditures and adjust this forecast to reflect the demographics, health
status, and other factors deemed necessary by the commissioner. The
commissioner shall contract with an actuarial consultant to make
recommendations for the adjustments needed to specifically reflect projected
spending for residents of this state.

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(c) The
commissioner may adjust the projected baseline as necessary to reflect any
updated federal projections or account for unanticipated changes in federal
policy.

(d) Medicare and long-term care
spending must not be included in the calculations required under this section.

Subd. 3.Actual spending and savings determination.By June 1,
2010, and each June 1 thereafter until June 1, 2020, the commissioner of
health shall determine the actual total private and public health care spending
for residents of this state for the calendar year two years before the current
calendar year, based on data collected under chapter 62J, and shall determine
the difference between the projected spending, as determined under subdivision
2, and the actual spending for that year. The actual spending must be certified
by an independent actuarial consultant. If the actual spending is less than the
projected spending, the commissioner shall determine, based on the proportion
of spending for state-administered health care programs to total private and
public health care spending for the calendar year two years before the current
calendar year, the percentage of the calculated aggregate savings amount
accruing to state-administered health care programs.

Subd. 4.Repayment of transfer.When accumulated savings accruing
to state-administered health care programs, as calculated under subdivision 3,
meet or exceed $50,000,000, the commissioner of health shall certify that event
to the commissioner of finance. In the next fiscal year following the
certification, the commissioner of finance shall transfer $50,000,000 from the
general fund to the health care access fund. The amount necessary to make the
transfer is appropriated from the general fund to the commissioner of finance.

Subd. 5.Definitions.(a) For purposes of this section, the
following definitions apply.

(a) The commissioner of
health shall establish a voluntary statewide roster, and develop a plan for a
registry and certification process for interpreters who provide high quality,
spoken language health care interpreter services. The roster, registry, and
certification process shall be based on the findings and recommendations set
forth by the Interpreter Services Work Group required under Laws 2007, chapter
147, article 12, section 13.

(b) By January 1, 2009, the
commissioner shall establish a roster of all available interpreters to address
access concerns, particularly in rural areas.

(i) development of standards
for registration that set forth educational requirements, training
requirements, demonstration of language proficiency and interpreting skills,
agreement to abide by a code of ethics, and a criminal background check;

(ii) recommendations for appropriate
alternate requirements in languages for which testing and training programs do
not exist;

(iii) recommendations for
appropriate fees; and

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(iv) recommendations
for establishing and maintaining the standards for inclusion in the registry;
and

(2) develop a plan for
implementing a certification process based on national testing and
certification processes for spoken language interpreters 12 months after the
establishment of a national certification process.

(d) The commissioner shall
consult with the Interpreter Stakeholder Group of the Upper Midwest Translators
and Interpreters Association for advice on the standards required to plan for
the development of a registry and certification process.

(e) The commissioner shall
charge an annual fee of $50 to include an interpreter in the roster. Fee
revenue shall be deposited in the state government special revenue fund.

EFFECTIVE DATE.This section is
effective the day following final enactment.

Subd. 2. Potential allocations. (a) On November
1, annually, the board or the board's designee under section 144E.40,
subdivision 2, shall determine the amount of the allocation of the prior year's
accumulation to each qualified ambulance service person. The prior year's net
investment gain or loss under paragraph (b) must be allocated and that year's
general fund appropriation, plus any transfer from the Cooper/Sams volunteer
ambulance account under section 144E.42, subdivision 2, and after deduction of
administrative expenses, also must be allocated.

(b) The difference in the
market value of the assets of the Cooper/Sams volunteer ambulance trust account
as of the immediately previous June 30 and the June 30 occurring 12 months
earlier must be reported on or before August 15 by the State Board of
Investment. The market value gain or loss must be expressed as a percentage of
the total potential award accumulations as of the immediately previous June 30,
and that positive or negative percentage must be applied to increase or
decrease the recorded potential award accumulation of each qualified ambulance
service person.

(c) The appropriation for
this purpose, after deduction of administrative expenses, must be divided by
the total number of additional ambulance service personnel years of service
recognized since the last allocation or 1,000 years of service, whichever is
greater. If the allocation is based on the 1,000 years of service, any
allocation not made for a qualified ambulance service person must be credited
to the Cooper/Sams volunteer ambulance account under section 144E.42,
subdivision 2. A qualified ambulance service person must be credited with a
year of service if the person is certified by the chief administrative officer
of the ambulance service as having rendered active ambulance service during the
12 months ending as of the immediately previous June 30. If the person has
rendered prior active ambulance service, the person must be additionally
credited with one-fifth of a year of service for each year of active ambulance
service rendered before June 30, 1993, but not to exceed in any year one
additional year of service or to exceed in total five years of prior service.
Prior active ambulance service means employment by or the provision of service
to a licensed ambulance service before June 30, 1993, as determined by the
person's current ambulance service based on records provided by the person that
were contemporaneous to the service. The prior ambulance service must be
reported on or before August 1 to the board in an affidavit from the chief
administrative officer of the ambulance service.

(d) Effective July 1, 2008,
notwithstanding paragraphs (a) to (c), the value of each service credit shall
be $447.19.

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Subdivision 1. Establishment.To the extent funds
are available for the purposes of this subdivision, the commissioner of
health, in consultation with a representative from Minnesota planning, the
commissioner of human services, and the commissioner of education, shall
develop and implement the Minnesota education now and babies later (MN ENABL)
program, targeted to adolescents ages 12 to 14, with the goal of reducing the
incidence of adolescent pregnancy in the state and promoting abstinence until
marriage. The program must provide a multifaceted, primary prevention,
community health promotion approach to educating and supporting adolescents in
the decision to postpone sexual involvement modeled after the ENABL program in
California. The commissioner of health shall consult with the chief of the
health education section of the California Department of Health Services for
general guidance in developing and implementing the program.

Subd. 2b. Operating payment rates. In determining
operating payment rates for admissions occurring on or after the rate year
beginning January 1, 1991, and every two years after, or more frequently as
determined by the commissioner, the commissioner shall obtain operating data
from an updated base year and establish operating payment rates per admission
for each hospital based on the cost-finding methods and allowable costs of the
Medicare program in effect during the base year. Rates under the general
assistance medical care, medical assistance, and MinnesotaCare programs shall
not be rebased to more current data on January 1, 1997, and January 1,
2005, and for the first 24 months of the rebased period beginning January 1,
2009. The base year operating payment rate per admission is standardized by
the case mix index and adjusted by the hospital cost index, relative values,
and disproportionate population adjustment. The cost and charge data used to
establish operating rates shall only reflect inpatient services covered by
medical assistance and shall not include property cost information and costs
recognized in outlier payments.

Subd. 3a. Payments. (a) Acute care hospital
billings under the medical assistance program must not be submitted until the
recipient is discharged. However, the commissioner shall establish monthly
interim payments for inpatient hospitals that have individual patient lengths
of stay over 30 days regardless of diagnostic category. Except as provided in
section 256.9693, medical assistance reimbursement for treatment of mental
illness shall be reimbursed based on diagnostic classifications. Individual
hospital payments established under this section and sections 256.9685,
256.9686, and 256.9695, in addition to third party and recipient liability, for
discharges occurring during the rate year shall not exceed, in aggregate, the
charges for the medical assistance covered inpatient services paid for the same
period of time to the hospital. This payment limitation shall be calculated
separately for medical assistance and general assistance medical care services.
The limitation on general assistance medical care shall be effective for
admissions occurring on or after July 1, 1991. Services that have rates
established under subdivision 11 or 12, must be limited separately from other
services. After consulting with the affected hospitals, the commissioner may
consider related hospitals one entity and may merge the payment rates while
maintaining separate provider numbers. The operating and property base rates
per admission or per day shall be derived from the best Medicare and claims
data available when rates are established. The commissioner shall determine the
best Medicare and claims data, taking into consideration variables of recency
of the data, audit disposition, settlement status, and the ability to set rates
in a timely manner. The commissioner shall notify hospitals of payment rates by
December 1 of the year preceding the rate year. The rate setting data must
reflect the admissions data used to establish relative values. Base year
changes from 1981 to the base year established for the rate year beginning January
1, 1991, and for subsequent rate years, shall not be limited to the limits
ending June 30, 1987, on the maximum rate of increase under subdivision 1. The
commissioner may adjust base year cost, relative value, and case mix index data
to exclude the costs of services that have been discontinued by the October 1
of the year preceding the rate year or that are paid separately from inpatient
services. Inpatient stays that encompass portions of two or more rate years
shall have payments established based on payment rates in effect at the time of
admission unless the date of admission

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preceded the rate
year in effect by six months or more. In this case, operating payment rates for
services rendered during the rate year in effect and established based on the
date of admission shall be adjusted to the rate year in effect by the hospital
cost index.

(b) For fee-for-service
admissions occurring on or after July 1, 2002, the total payment, before
third-party liability and spenddown, made to hospitals for inpatient services
is reduced by .5 percent from the current statutory rates.

(c) In addition to the
reduction in paragraph (b), the total payment for fee-for-service admissions
occurring on or after July 1, 2003, made to hospitals for inpatient services
before third-party liability and spenddown, is reduced five percent from the
current statutory rates. Mental health services within diagnosis related groups
424 to 432, and facilities defined under subdivision 16 are excluded from this
paragraph.

(d) In addition to the
reduction in paragraphs (b) and (c), the total payment for fee-for-service
admissions occurring on or after July 1, 2005, made to hospitals for inpatient
services before third-party liability and spenddown, is reduced 6.0 percent
from the current statutory rates. Mental health services within diagnosis
related groups 424 to 432 and facilities defined under subdivision 16 are
excluded from this paragraph. Notwithstanding section 256.9686, subdivision 7,
for purposes of this paragraph, medical assistance does not include general
assistance medical care. Payments made to managed care plans shall be reduced
for services provided on or after January 1, 2006, to reflect this reduction.

(e) In addition to the
reductions in paragraphs (b), (c), and (d), the total payment for
fee-for-service admissions occurring on or after July 1, 2008, through June 30,
2009, made to hospitals for inpatient services before third-party liability and
spenddown, is reduced 3.46 percent from the current statutory rates. Mental
health services with diagnosis related groups 424 to 432 and facilities defined
under subdivision 16 are excluded from this paragraph. Payments made to managed
care plans shall be reduced for services provided on or after January 1, 2009,
through June 30, 2009, to reflect this reduction.

(f) In addition to the
reductions in paragraphs (b), (c), and (d), the total payment for fee-for-service
admissions occurring on or after July 1, 2009, through June 30, 2010, made to
hospitals for inpatient services before third-party liability and spenddown, is
reduced 1.9 percent from the current statutory rates. Mental health services
with diagnosis related groups 424 to 432 and facilities defined under
subdivision 16 are excluded from this paragraph. Payments made to managed care
plans shall be reduced for services provided on or after July 1, 2009, through
June 30, 2010, to reflect this reduction.

(g) In addition to the
reductions in paragraphs (b), (c), and (d), the total payment for
fee-for-service admissions occurring on or after July 1, 2010, made to
hospitals for inpatient services before third-party liability and spenddown, is
reduced 1.79 percent from the current statutory rates. Mental health services
with diagnosis related groups 424 to 432 and facilities defined under
subdivision 16 are excluded from this paragraph. Payments made to managed care
plans shall be reduced for services provided on or after July 1, 2010, to
reflect this reduction.

Subd. 8. Program established. (a) The
commissioner, in cooperation with the commissioner of commerce, shall establish
the Minnesota partnership for long-term care program to provide for the
financing of long-term care through a combination of private insurance and
medical assistance.

(b) An individual who meets
the requirements in this paragraph is eligible to participate in the
partnership program. The individual must:

(1) be a Minnesota resident
at the time coverage first became effective under the partnership policy;
and

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(2) be a
beneficiary of a partnership policy that (i) is issued on or after the
effective date of the state plan amendment implementing the partnership program
in Minnesota, or (ii) qualifies as a partnership policy under the provisions of
subdivision 8a; and.

(3) have exhausted all of
the benefits under the partnership policy as described in this section.
Benefits received under a long-term care insurance policy before July 1, 2006,
do not count toward the exhaustion of benefits required in this subdivision.

Subd. 9. Medical assistance eligibility. (a)
Upon application for medical assistance program payment of long-term care
services by an individual who meets the requirements described in subdivision
8, the commissioner shall determine the individual's eligibility for medical
assistance according to paragraphs (b) to (i).

(b) After determining assets
subject to the asset limit under section 256B.056, subdivision 3 or 3c, or
256B.057, subdivision 9 or 10, the commissioner shall allow the individual to
designate assets to be protected from recovery under subdivisions 13 and 15 up
to the dollar amount of the benefits utilized under the partnership policy
as of the effective date of eligibility for medical assistance program payment
of long-term care services. Benefits utilized under a long-term care insurance
policy before July 1, 2006, do not count for the purpose of determining the
amount of assets that can be designated. Designated assets shall be
disregarded for purposes of determining eligibility for payment of long-term
care services. The dollar amount of benefits utilized must be equal to the
amount of claims paid by the issuer under the policy as verified by the issuer.

(c) The individual shall
identify the designated assets and the full fair market value of those assets
and designate them as assets to be protected at the time of initial
application for medical assistance payment of long-term care services.
The full fair market value of real property or interests in real property shall
be based on the most recent full assessed value for property tax purposes for
the real property, unless the individual provides a complete professional
appraisal by a licensed appraiser to establish the full fair market value. The
extent of a life estate in real property shall be determined using the life
estate table in the health care program's manual. Ownership of any asset in
joint tenancy shall be treated as ownership as tenants in common for purposes
of its designation as a disregarded asset. The unprotected value of any
protected asset is subject to estate recovery according to subdivisions 13 and
15.

(d) The right to designate
assets to be protected is personal to the individual and ends when the
individual dies, except as otherwise provided in subdivisions 13 and 15. It
does not include the increase in the value of the protected asset and the
income, dividends, or profits from the asset. It may be exercised by the
individual or by anyone with the legal authority to do so on the individual's
behalf. It shall not be sold, assigned, transferred, or given away.

(e) If the dollar amount
of the benefits utilized under a partnership policy is greater than the full
fair market value of all assets protected at the time of the application for
medical assistance long-term care services, As the individual continues
to utilize benefits under a partnership policy after eligibility for medical
assistance payment of long-term care services begins, the individual may
designate, for additional protection, an increase in the value of protected
assets and additional assets that become available during the individual's
lifetime for protection under this section up to the amount of
additional benefits utilized. The individual must make the designation in
writing to the county agency no later than the last date on which the
individual must report a change in circumstances to the county agency, as
provided for under the medical assistance program. Any excess used for this
purpose shall not be available to the individual's estate to protect assets in
the estate from recovery under section 256B.15 or 524.3-1202, or otherwise.
The amount used for this purpose must reduce the unused amount of asset
protection available to protect assets in the individual's estate from recovery
under section 256B.15 or 524.3-1202, or otherwise.

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(f) This section
applies only to estate recovery under United States Code, title 42, section
1396p, subsections (a) and (b), and does not apply to recovery authorized by
other provisions of federal law, including, but not limited to, recovery from
trusts under United States Code, title 42, section 1396p, subsection (d)(4)(A)
and (C), or to recovery from annuities, or similar legal instruments, subject
to section 6012, subsections (a) and (b), of the Deficit Reduction Act of 2005,
Public Law 109-171.

(g) An individual's
protected assets owned by the individual's spouse who applies for payment of
medical assistance long-term care services shall not be protected assets or
disregarded for purposes of eligibility of the individual's spouse solely
because they were protected assets of the individual.

(h) Assets designated under
this subdivision shall not be subject to penalty under section 256B.0595.

Subd. 13e. Payment rates. (a) The basis for
determining the amount of payment shall be the lower of the actual acquisition
costs of the drugs plus a fixed dispensing fee; the maximum allowable cost set
by the federal government or by the commissioner plus the fixed dispensing fee;
or the usual and customary price charged to the public. The amount of payment
basis must be reduced to reflect all discount amounts applied to the charge by
any provider/insurer agreement or contract for submitted charges to medical
assistance programs. The net submitted charge may not be greater than the
patient liability for the service. The pharmacy dispensing fee shall be $3.65,
except that the dispensing fee for intravenous solutions which must be
compounded by the pharmacist shall be $8 per bag, $14 per bag for cancer
chemotherapy products, and $30 per bag for total parenteral nutritional
products dispensed in one liter quantities, or $44 per bag for total parenteral
nutritional products dispensed in quantities greater than one liter. Actual
acquisition cost includes quantity and other special discounts except time and
cash discounts. Effective July 1, 2008, the actual acquisition cost of a
drug shall be estimated by the commissioner, at average wholesale price minus 12
14 percent. The actual acquisition cost of antihemophilic factor drugs
shall be estimated at the average wholesale price minus 30 percent. The maximum
allowable cost of a multisource drug may be set by the commissioner and it
shall be comparable to, but no higher than, the maximum amount paid by other
third-party payors in this state who have maximum allowable cost programs.
Establishment of the amount of payment for drugs shall not be subject to the
requirements of the Administrative Procedure Act.

(b) An additional dispensing
fee of $.30 may be added to the dispensing fee paid to pharmacists for legend
drug prescriptions dispensed to residents of long-term care facilities when a
unit dose blister card system, approved by the department, is used. Under this
type of dispensing system, the pharmacist must dispense a 30-day supply of
drug. The National Drug Code (NDC) from the drug container used to fill the
blister card must be identified on the claim to the department. The unit dose
blister card containing the drug must meet the packaging standards set forth in
Minnesota Rules, part 6800.2700, that govern the return of unused drugs to the
pharmacy for reuse. The pharmacy provider will be required to credit the
department for the actual acquisition cost of all unused drugs that are
eligible for reuse. Over-the-counter medications must be dispensed in the
manufacturer's unopened package. The commissioner may permit the drug clozapine
to be dispensed in a quantity that is less than a 30-day supply.

(c) Whenever a generically
equivalent product is available, payment shall be on the basis of the actual
acquisition cost of the generic drug, or on the maximum allowable cost established
by the commissioner.

(d) The basis for
determining the amount of payment for drugs administered in an outpatient
setting shall be the lower of the usual and customary cost submitted by the
provider or the amount established for Medicare by the United States Department
of Health and Human Services pursuant to title XVIII, section 1847a of the
federal Social Security Act.

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(e) The
commissioner may negotiate lower reimbursement rates for specialty pharmacy
products than the rates specified in paragraph (a). The commissioner may
require individuals enrolled in the health care programs administered by the
department to obtain specialty pharmacy products from providers with whom the
commissioner has negotiated lower reimbursement rates. Specialty pharmacy
products are defined as those used by a small number of recipients or
recipients with complex and chronic diseases that require expensive and challenging
drug regimens. Examples of these conditions include, but are not limited to:
multiple sclerosis, HIV/AIDS, transplantation, hepatitis C, growth hormone
deficiency, Crohn's Disease, rheumatoid arthritis, and certain forms of cancer.
Specialty pharmaceutical products include injectable and infusion therapies,
biotechnology drugs, high-cost therapies, and therapies that require complex
care. The commissioner shall consult with the formulary committee to develop a
list of specialty pharmacy products subject to this paragraph. In consulting
with the formulary committee in developing this list, the commissioner shall
take into consideration the population served by specialty pharmacy products,
the current delivery system and standard of care in the state, and access to
care issues. The commissioner shall have the discretion to adjust the
reimbursement rate to prevent access to care issues.

Subdivision 1. Co-payments. (a) Except as provided in
subdivision 2, the medical assistance benefit plan shall include the following
co-payments for all recipients, effective for services provided on or after
October 1, 2003, and before January 1, 2009:

(1) $3 per nonpreventive
visit. For purposes of this subdivision, a visit means an episode of service
which is required because of a recipient's symptoms, diagnosis, or established
illness, and which is delivered in an ambulatory setting by a physician or
physician ancillary, chiropractor, podiatrist, nurse midwife, advanced practice
nurse, audiologist, optician, or optometrist;

(2) $3 for eyeglasses;

(3) $6 for nonemergency
visits to a hospital-based emergency room; and

(4) $3 per brand-name drug
prescription and $1 per generic drug prescription, subject to a $12 per month
maximum for prescription drug co-payments. No co-payments shall apply to
antipsychotic drugs when used for the treatment of mental illness.

(b) Except as provided in
subdivision 2, the medical assistance benefit plan shall include the following
co-payments for all recipients, effective for services provided on or after
January 1, 2009:

(1) $6 for nonemergency
visits to a hospital-based emergency room; and

(2) $3 per brand-name drug
prescription and $1 per generic drug prescription, subject to a $7 per month
maximum for prescription drug co-payments. No co-payments shall apply to
antipsychotic drugs when used for the treatment of mental illness.;
and

(3) for individuals
identified by the commissioner with income at or below 100 percent of the
federal poverty guidelines, total monthly co-payments must not exceed five
percent of family income. For purposes of this paragraph, family income is the
total earned and unearned income of the individual and the individual's spouse,
if the spouse is enrolled in medical assistance and also subject to the five
percent limit on co-payments.

(c) Recipients of medical
assistance are responsible for all co-payments in this subdivision.

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Subd. 3. Collection. (a) The medical assistance
reimbursement to the provider shall be reduced by the amount of the co-payment,
except that reimbursement for prescription drugs reimbursements
shall not be reduced:

(1) once a recipient has
reached the $12 per month maximum or the $7 per month maximum effective January
1, 2009, for prescription drug co-payments; or

(2) for a recipient
identified by the commissioner under 100 percent of the federal poverty
guidelines who has met their monthly five percent co-payment limit.

(b) The provider collects
the co-payment from the recipient. Providers may not deny services to
recipients who are unable to pay the co-payment.

(c) Medical assistance
reimbursement to fee-for-service providers and payments to managed care plans
shall not be increased as a result of the removal of the co-payments effective
January 1, 2009.

Sec. 12. [256B.194] FEDERAL PAYMENTS.

The commissioner may require
medical assistance and MinnesotaCare providers to provide any information necessary
to determine Medicaid-related costs, and require the cooperation of providers
in any audit or review necessary to ensure payments are limited to cost. This
section does not apply to providers who are exempt from the provisions of the
CMS final rule, published May 29, 2007, at Federal Register, Vol. 72, No. 100,
governing payments to providers that are units of government. This section
becomes effective when the CMS final rule goes into effect at the end of the
moratorium imposed by Congress.

Subdivision 1. Facility fee for hospital emergency room
and clinic visit. (a) The commissioner shall establish a facility fee
payment mechanism that will pay a facility fee to all enrolled outpatient
hospitals for each emergency room or outpatient clinic visit provided on or
after July 1, 1989. This payment mechanism may not result in an overall
increase in outpatient payment rates. This section does not apply to federally mandated
maximum payment limits, department-approved program packages, or services
billed using a nonoutpatient hospital provider number.

(b) For fee-for-service
services provided on or after July 1, 2002, the total payment, before
third-party liability and spenddown, made to hospitals for outpatient hospital
facility services is reduced by .5 percent from the current statutory rates.

(c) In addition to the
reduction in paragraph (b), the total payment for fee-for-service services
provided on or after July 1, 2003, made to hospitals for outpatient hospital
facility services before third-party liability and spenddown, is reduced five
percent from the current statutory rates. Facilities defined under section
256.969, subdivision 16, are excluded from this paragraph.

(d) In addition to the
reductions in paragraphs (b) and (c), the total payment for fee-for-service
services provided on or after July 1, 2008, made to hospitals for outpatient
hospital facility services before third-party liability and spenddown, is
reduced three percent from the current statutory rates. Mental health services
and facilities defined under section 256.969, subdivision 16, are excluded from
this paragraph.

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Subd. 5a. Managed care contracts. (a) Managed
care contracts under this section and sections 256L.12 and 256D.03, shall be
entered into or renewed on a calendar year basis beginning January 1, 1996.
Managed care contracts which were in effect on June 30, 1995, and set to renew
on July 1, 1995, shall be renewed for the period July 1, 1995 through December
31, 1995 at the same terms that were in effect on June 30, 1995. The
commissioner may issue separate contracts with requirements specific to
services to medical assistance recipients age 65 and older.

(b) A prepaid health plan
providing covered health services for eligible persons pursuant to chapters
256B, 256D, and 256L, is responsible for complying with the terms of its
contract with the commissioner. Requirements applicable to managed care
programs under chapters 256B, 256D, and 256L, established after the effective
date of a contract with the commissioner take effect when the contract is next
issued or renewed.

(c) Effective for services
rendered on or after January 1, 2003, the commissioner shall withhold five
percent of managed care plan payments under this section for the prepaid
medical assistance and general assistance medical care programs pending
completion of performance targets. Each performance target must be
quantifiable, objective, measurable, and reasonably attainable, except in the
case of a performance target based on a federal or state law or rule. Criteria
for assessment of each performance target must be outlined in writing prior to
the contract effective date. The withheld funds must be returned no sooner than
July of the following year if performance targets in the contract are achieved.
The commissioner may exclude special demonstration projects under subdivision
23. A managed care plan or a county-based purchasing plan under section
256B.692 may include as admitted assets under section 62D.044 any amount
withheld under this paragraph that is reasonably expected to be returned.

(d)(1) Effective for
services rendered on or after January 1, 2009, the commissioner shall withhold
three percent of managed care plan payments under this section for the prepaid medical
assistance and general assistance medical care programs. The withheld funds
must be returned no sooner than July 1 and no later than July 31 of the
following year. The commissioner may exclude special demonstration projects
under subdivision 23.

(2) A managed care plan or a
county-based purchasing plan under section 256B.692 may include as admitted
assets under section 62D.044 any amount withheld under this paragraph. The
return of the withhold under this paragraph is not subject to the requirements
of paragraph (c).

(a) For outpatient hospital
facility fee payments for services rendered on or after October 1, 1992, the
commissioner of human services shall pay the lower of (1) submitted charge, or
(2) 32 percent above the rate in effect on June 30, 1992, except for those
services for which there is a federal maximum allowable payment. Effective for
services rendered on or after January 1, 2000, payment rates for nonsurgical
outpatient hospital facility fees and emergency room facility fees shall be
increased by eight percent over the rates in effect on December 31, 1999,
except for those services for which there is a federal maximum allowable
payment. Services for which there is a federal maximum allowable payment shall
be paid at the lower of (1) submitted charge, or (2) the federal maximum
allowable payment. Total aggregate payment for outpatient hospital facility fee
services shall not exceed the Medicare upper limit. If it is determined that a
provision of this section conflicts with existing or future requirements of the
United States government with respect to federal financial participation in
medical assistance, the federal requirements prevail. The commissioner may, in
the aggregate, prospectively reduce payment rates to avoid reduced federal
financial participation resulting from rates that are in excess of the Medicare
upper limitations.

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(b) Notwithstanding
paragraph (a), payment for outpatient, emergency, and ambulatory surgery
hospital facility fee services for critical access hospitals designated under
section 144.1483, clause (10), shall be paid on a cost-based payment system
that is based on the cost-finding methods and allowable costs of the Medicare
program.

(c) Effective for services
provided on or after July 1, 2003, rates that are based on the Medicare
outpatient prospective payment system shall be replaced by a budget neutral
prospective payment system that is derived using medical assistance data. The
commissioner shall provide a proposal to the 2003 legislature to define and
implement this provision.

(d) For fee-for-service
services provided on or after July 1, 2002, the total payment, before
third-party liability and spenddown, made to hospitals for outpatient hospital
facility services is reduced by .5 percent from the current statutory rate.

(e) In addition to the
reduction in paragraph (d), the total payment for fee-for-service services
provided on or after July 1, 2003, made to hospitals for outpatient hospital
facility services before third-party liability and spenddown, is reduced five
percent from the current statutory rates. Facilities defined under section
256.969, subdivision 16, are excluded from this paragraph.

(f) In addition to the
reductions in paragraphs (d) and (e), the total payment for fee-for-service
services provided on or after July 1, 2008, made to hospitals for outpatient
hospital facility services before third-party liability and spenddown, is
reduced three percent from the current statutory rates. Mental health services
and facilities defined under section 256.969, subdivision 16, are excluded from
this paragraph.

ARTICLE 18

HEALTH AND HUMAN SERVICES
APPROPRIATIONS

Section 1. SUMMARY OF
APPROPRIATIONS.

The amounts shown in this section summarize direct
appropriations by fund made in this article.

20082009Total

General$(46,789,000)$(124,196,000)$(170,985,000)

State Government Special
Revenue114,000667,000781,000

Health Care Access-0-(770,000)(770,000)

Federal TANF29,919,00056,356,00086,275,000

Total$(16,756,000)$(67,943,000)$(84,699,000)

Sec. 2. APPROPRIATIONS.

The sums shown in the
columns marked "Appropriations" are added to or, if shown in
parentheses, subtracted from the appropriations in Laws 2007, chapter 147, or
other law to the agencies and for the purposes specified in this article. The
appropriations are from the general fund, or another named fund, and are
available for the fiscal years indicated for each purpose. The figures
"2008" and "2009" used in this article mean that the
addition or subtraction from appropriations listed under them are available for
the fiscal year ending June 30, 2008, or June 30, 2009, respectively. "The
first year" is fiscal year 2008. "The second year" is fiscal
year 2009. "The biennium" is fiscal years 2008 and 2009. Supplemental
appropriations and reductions for the fiscal year ending June 30, 2008, are
effective the day following final enactment.

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APPROPRIATIONS

Available for the Year

Ending June 30

20082009

Sec. 3. HUMAN
SERVICES

Subdivision 1.Total
Appropriation$(16,870,000)$(64,480,000)

Appropriations by Fund

20082009

General(46,789,000)(120,066,000)

Health Care Access-0-(770,000)

Federal TANF29,919,00056,356,000

The appropriation additions or
reductions for each purpose are shown in the following subdivisions.

Additional
Working Family Credit Expenditures to be Claimed for TANF/MOE.In addition to the
transfer under prior law, the commissioner may count the following amounts of
working family credit expenditure as TANF/MOE:

(1) $21,085,000 in fiscal
year 2008;

(2) $48,408,000 in fiscal
year 2009;

(3) ($468,000) in fiscal
year 2010; and

(4) ($19,000) in fiscal year
2011.

Notwithstanding any contrary
provision in this article, this rider expires June 30, 2011.

Subd. 2.Agency
Management

Financial Operations-0-(5,867,000)

Transfer
from Special Revenue Fund.$1,098,000 of the amount
transferred into the special revenue fund from nongrant operating balances of
general fund appropriations carried forward under Laws 2007, chapter 147,
article 19, section 20, must be transferred to the general fund by June 30,
2009.

Base
Adjustment.The general fund base is increased $23,000 in fiscal year 2010 and
$26,000 in fiscal year 2011.

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APPROPRIATIONS

Available for the Year

Ending June 30

20082009

Subd. 3.Revenue
and Pass-Through Revenue Expenditures

Federal TANF-0-950,000

TANF
Transfer to Federal Child Care and Development Fund.The following TANF fund
amounts are appropriated to the commissioner for the purposes of MFIP and
transition year child care under Minnesota Statutes, section 119B.05:

(1) fiscal year 2009,
$950,000; and

(2) fiscal year 2010,
$1,085,000.

The commissioner shall
authorize the transfer of sufficient TANF funds to the federal child care and
development fund to meet this appropriation and shall ensure that all
transferred funds are expended according to federal child care and development
fund regulations.

Supported
Work.(1) Of the TANF
appropriation, $7,100,000 in fiscal year 2009 is for supported work for MFIP
participants, to be allocated to counties and tribes based on the criteria
under clauses (1) and (2) and is available until expended. This appropriation
shall become part of base level funding to the commissioner for the biennium beginning
July 1, 2009. Paid transitional work experience and other supported employment
under this clause shall provide a continuum of employment assistance, including
outreach and recruitment, program orientation and intake, testing and
assessment, job development and marketing, preworksite training, supported
worksite experience, job coaching, and postplacement follow-up, in addition to
extensive case management and referral services. The base for this program
shall be $7,100,000 in fiscal year 2010 and zero in fiscal year 2011.

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(2) A county or tribe is
eligible to receive an allocation under clause (1) if:

(i) the county or tribe is
not meeting the federal work participation rate;

(ii) the county or tribe has
participants who are required to perform work activities under Minnesota
Statutes, chapter 256J, but are not meeting hourly work requirements; and

(iii) the county or tribe
has assessed participants who have completed six weeks of job search or are
required to perform work activities and are not meeting the hourly
requirements, and the county or tribe has determined that the participant would
benefit from working in a supported work environment.

(3) A county or tribe may
also be eligible for funds in order to contract for supplemental hours of paid
work at the participant's child's place of education, child care location, or the
child's physical or mental health treatment facility or office. Grants to
counties and tribes under this clause are specifically for MFIP participants
who need to work up to five hours more per week in order to meet the hourly
work requirement, and the participant's employer cannot or will not offer more
hours to the participant.

(c)Basic Sliding Fee Child Care Assistance Grants-0-(9,227,000)

Child Care
and Development Fund Unexpended Balance.In addition to the amount
provided in this section, the commissioner shall expend $9,227,000 in fiscal
year 2009 from the federal child care and development fund unexpended balance
for basic sliding fee child care under Minnesota Statutes, section 119B.03. The
commissioner shall ensure that all child care and development funds are
expended according to the federal child care and development fund regulations.

Base
Adjustment.The general fund base is
increased by $9,444,000 in fiscal year 2010 and $9,227,000 in fiscal year 2011.

(d)Child Care Development Grants-0-(360,000)

Grants
Reduction.Effective July 1, 2008, base
level funding for nonforecast, general fund child care development grants
issued under this paragraph shall be reduced by 1.8 percent at the allotment
level.

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Base
Adjustment.The general fund base is
increased by $1,688,000 in each year of the fiscal year 2010 and 2011 biennium.

Funding
Usage.Up to 75 percent of the
fiscal year 2010 appropriation for children's mental health screening grants
may be used to fund calendar year 2009 allocations for these programs, with the
resulting calendar year funding pattern continuing into the future.

Base
Adjustment.The general fund base is
decreased by $98,000 in each year of the fiscal year 2010 and 2011 biennium.

Grants
Reduction.Effective July 1, 2008, base level funding for nonforecast, general fund
children and community services grants issued under this paragraph shall be
reduced by 1.8 percent at the allotment level.

(g)Minnesota Supplemental Aid Grants-0-201,000

Group Residential Housing Grants-0-(133,000)

(h)Other Children's and Economic Assistance Grants

Appropriations
by Fund

General-0-352,000

Federal TANF-0-360,000

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APPROPRIATIONS

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20082009

Grants
Reduction.Effective July 1, 2008, base level funding for nonforecast, general fund
other children's and economic assistance grants issued under this paragraph
shall be reduced by 1.8 percent at the allotment level.

The base for grants impacted
by this reduction shall increase by $4,000 in fiscal year 2010 and $14,000 in
fiscal year 2011.

Foodshelf
Programs.Of the general fund
appropriation, $500,000 in fiscal year 2009 is for foodshelf programs under
Minnesota Statutes, section 256E.34. This is a onetime appropriation and is available
until expended.

Long-Term
Homeless Supportive Services.$145,000 from the general
fund and $360,000 from TANF in fiscal year 2009 is for the long-term homeless
supportive services fund under Minnesota Statutes, section 256K.26. This is a
onetime appropriation and is available until expended.

(1) $400,000 in fiscal year
2009 from the general fund and $200,000 in fiscal year 2009 from the health
care access fund are for the incentive program under Minnesota Statutes,
section 256.962, subdivision 5. For the biennium beginning July 1, 2009, base
level funding for this activity shall be $360,000 from the general fund and
$160,000 from the health care access fund; and

(2) $100,000 in fiscal year
2009 from the general fund and $50,000 in fiscal year 2009 from the health care
access fund are for the outreach grants under Minnesota Statutes, section
256.962, subdivision 2. For the biennium beginning July 1, 2009, base level
funding for this activity shall be $90,000 from the general fund and $40,000
from the health care access fund.

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(b)MA Basic Health Care Grants - Families and Children-0-(17,280,000)

Third-Party
Liability.(a) During fiscal year 2009, the commissioner shall employ a contractor paid
on a percentage basis to improve third-party collections. Improvement
initiatives may include, but not be limited to, efforts to improve postpayment
collection from nonresponsive claims and efforts to uncover third-party payers
the commissioner has been unable to identify.

(b) In fiscal year 2009, the
first $1,098,000 of recoveries, after contract payments and federal repayments,
is appropriated to the commissioner for technology-related expenses.

Administrative
Costs.(a)
For contracts effective on or after January 1, 2009, the commissioner shall
limit aggregate administrative costs paid to managed care plans under Minnesota
Statutes, section 256B.69, and to county-based purchasing plans under Minnesota
Statutes, section 256B.692, to an overall average of 6.6 percent of total
contract payments under Minnesota Statutes, sections 256B.69 and 256B.692, for
each calendar year. For purposes of this paragraph, administrative costs do not
include premium taxes paid under Minnesota Statutes, section 297I.05,
subdivision 5, and provider surcharges paid under Minnesota Statutes, section
256.9657, subdivision 3.

(b) Notwithstanding any law
to the contrary, the commissioner may reduce or eliminate administrative
requirements to meet the administrative target under paragraph (a).

(c) Notwithstanding any
contrary provision of this article, this rider shall not expire.

Hospital
Payment Delay.Notwithstanding Laws 2005,
First Special Session chapter 4, article 9, section 2, subdivision 6, payments
from the Medicaid Management Information System that would otherwise have been
made for inpatient hospital services for medical assistance enrollees are
delayed as follows: (1) for fiscal year 2008, June payments must be included in
the first payments in fiscal year 2009; and (2) for fiscal year 2009, June
payments must be included in the first payment of fiscal year 2010. The
provisions of Minnesota Statutes, section 16A.124, do not apply to these
delayed payments. Notwithstanding any contrary provision in this article, this
paragraph expires on June 30, 2010.

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Minnesota
Disability Health Options Rate Setting Methodology.The
commissioner shall develop and implement a methodology for risk adjusting
payments for community alternatives for disabled individuals (CADI) and
traumatic brain injury (TBI) home and community-based waiver services delivered
under the Minnesota disability health options program (MnDHO) effective January
1, 2009. The commissioner shall take into account the weighting system used to
determine county waiver allocations in developing the new payment methodology.
Growth in the number of enrollees receiving CADI or TBI waiver payments through
MnDHO is limited to an increase of 200 enrollees in each calendar year from
January 2009 through December 2011. If those limits are reached, additional
members may be enrolled in MnDHO for basic care services only as defined under
Minnesota Statutes, section 256B.69, subdivision 28, and the commissioner may
establish a waiting list for future access of MnDHO members to those waiver
services.

MA Basic
Elderly and Disabled Adjustments.For the fiscal year ending
June 30, 2009, the commissioner may adjust the rates for each service affected
by rate changes under this section in such a manner across the fiscal year to
achieve the necessary cost savings and minimize disruption to service
providers, notwithstanding the requirements of Laws 2007, chapter 147, article
7, section 71.

(d)General Assistance Medical Care Grants-0-(6,971,000)

(e)Other Health Care Grants-0-(17,000)

MinnesotaCare
Outreach Grants Special Revenue Account.The balance in the
MinnesotaCare outreach grants special revenue account on July 1, 2009,
estimated to be $900,000, must be transferred to the general fund.

Grants
Reduction.Effective July 1, 2008, base level funding for nonforecast, general fund
health care grants issued under this paragraph shall be reduced by 1.8 percent
at the allotment level.

Subd. 6.Continuing
Care Grants

(a)Aging and Adult Services Grants-0-(337,000)

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Base
Adjustment.The general fund base is
increased by $71,000 in fiscal year 2010 and $70,000 in fiscal year 2011.

Grants
Reduction.Effective July 1, 2008, base level funding for nonforecast, general fund
aging and adult services state grants issued under this paragraph shall be
reduced by 1.8 percent at the allotment level.

Aging and
Adult Services Adjustments. For the fiscal year ending June 30, 2009, the
commissioner may allocate each grant affected by rate changes under this
section in such a manner across the fiscal year to achieve the necessary cost
savings and minimize disruption to grantees. To implement this paragraph, the
commissioner may waive the requirements of Laws 2007, chapter 147, article 7,
section 71, including the employee compensation-related cost requirements.

Living-At-Home/Block Nurse Program Funding.Notwithstanding the provisions
of Minnesota Statutes, section 256B.0917, subdivision 8, for the fiscal year
beginning July 1, 2008, the commissioner of human services shall transfer
$240,000 from the community service grant program under Minnesota Statutes,
section 256B.0917, subdivision 13, to the living-at-home/block nurse program
under Minnesota Statutes, section 256B.0917, subdivision 8, to provide $20,000
each for 12 living-at-home/block nurse programs currently operating without
base funding. This is onetime funding.

Alternative Care Grants-0-(198,000)

This reduction is onetime.

(b)MA Long-Term Care Facilities Grants(2,306,000) 3,045,000

Nursing
Facility Rate Increase.(a) For the rate year
beginning October 1, 2008, the commissioner shall make available to each
nursing facility reimbursed under Minnesota Statutes, section 256B.434,
operating payment rate adjustments equal to 1.00 percent of the operating
payment rates determined by the blending in Minnesota Statutes, section
256B.441, subdivision 55, paragraph (a).

(b) Seventy-five percent of
the money resulting from the rate adjustment under paragraph (a) must be used
for increases in compensation-related costs for employees directly employed by
the nursing facility on or after the effective date of the rate adjustment,
except:

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(1) the administrator;

(2) persons employed in the
central office of a corporation that has an ownership interest in the nursing
facility or exercises control over the nursing facility; and

(3) persons paid by the
nursing facility under a management contract.

(c) Two-thirds of the money
available under paragraph (b) must be used for wage increases for all employees
directly employed by the nursing facility on or after the effective date of the
rate adjustment, except those listed in paragraph (b), clauses (1) to (3). The
wage adjustment that employees receive under this paragraph must be paid as an
equal hourly percentage wage increase for all eligible employees. All wage
increases under this paragraph must be effective on the same date. Only costs
associated with the portion of the equal hourly percentage wage increase that
goes to all employees shall qualify under this paragraph. Costs associated with
wage increases in excess of the amount of the equal hourly percentage wage
increase provided to all employees shall be allowed only for meeting the
requirements in paragraph (b). This paragraph shall not apply to employees
covered by a collective bargaining agreement.

(4) other benefits provided,
subject to the approval of the commissioner.

(e) The portion of the rate adjustment
under paragraph (a) that is not subject to the requirements in paragraphs (b)
and (c) shall be provided to nursing facilities effective October 1, 2008.

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(f) Nursing facilities may
apply for the portion of the rate adjustment under paragraph (a) that is
subject to the requirements in paragraphs (b) and (c). The application must be
submitted to the commissioner within six months of the effective date of the
rate adjustment, and the nursing facility must provide additional information
required by the commissioner within nine months of the effective date of the
rate adjustment. The commissioner must respond to all applications within three
weeks of receipt. The commissioner may waive the deadlines in this paragraph
under extraordinary circumstances, to be determined at the sole discretion of
the commissioner. The application must contain:

(1) an estimate of the
amounts of money that must be used as specified in paragraphs (b) and (c);

(2) a detailed distribution
plan specifying the allowable compensation-related and wage increases the
nursing facility will implement to use the funds available in clause (1);

(3) a description of how the
nursing facility will notify eligible employees of the contents of the approved
application, which must provide for giving each eligible employee a copy of the
approved application, excluding the information required in clause (1), or
posting a copy of the approved application, excluding the information required
in clause (1), for a period of at least six weeks in an area of the nursing
facility to which all eligible employees have access; and

(4) instructions for
employees who believe they have not received the compensation-related or wage
increases specified in clause (2), as approved by the commissioner, and which
must include a mailing address, e-mail address, and the telephone number that
may be used by the employee to contact the commissioner or the commissioner's
representative.

(g) The commissioner shall
ensure that cost increases in distribution plans under paragraph (f), clause (2),
that may be included in approved applications, comply with the following
requirements:

(1) costs to be incurred
during the applicable rate year resulting from wage and salary increases
effective after October 1, 2007, and prior to the first day of the nursing
facility's payroll period that includes October 1, 2008, shall be allowed if
they were not used in the prior year's application;

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(2) a portion of the costs
resulting from tenure-related wage or salary increases may be considered to be
allowable wage increases, according to formulas that the commissioner shall
provide, where employee retention is above the average statewide rate of
retention of direct care employees;

(3) the annualized amount of
increases in costs for the employer's share of health and dental insurance,
life insurance, disability insurance, and workers' compensation shall be
allowable compensation-related increases if they are effective on or after
April 1, 2008, and prior to April 1, 2009; and

(4) for nursing facilities
in which employees are represented by an exclusive bargaining representative,
the commissioner shall approve the application only upon receipt of a letter of
acceptance of the distribution plan, in regard to members of the bargaining
unit, signed by the exclusive bargaining agent and dated after May 25, 2008.
Upon receipt of the letter of acceptance, the commissioner shall deem all
requirements of this rider as having been met in regard to the members of the
bargaining unit.

(h) The commissioner shall
review applications received under paragraph (f) and shall provide the portion
of the rate adjustment under paragraphs (b) and (c) if the requirements of this
rider have been met. The rate adjustment shall be effective October 1, 2008.
Notwithstanding paragraph (a), if the approved application distributes less
money than is available, the amount of the rate adjustment shall be reduced so
that the amount of money made available is equal to the amount to be
distributed.

(i) Of the general fund
appropriation, $2,877,000 in fiscal year 2009 is for the purposes of paragraphs
(a) to (h).

(j) Notwithstanding any
contrary provision of this article, this rider shall not expire.

Nursing
Facility Temporary Rate Adjustment.(a) Of the general fund appropriation,
$2,877,000 for fiscal year 2009 is to make available to nursing facilities
reimbursed under Minnesota Statutes, section 256B.434, for the rate year
beginning October 1, 2008, a temporary rate adjustment equal to 1.0 percent of
the operating payment rates determined by the blending in Minnesota Statutes,
section 256B.441, subdivision 55, paragraph (a). This rate adjustment shall be
removed from the facility's operating payment rate for the rate year beginning
October 1, 2009.

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(b) Seventy-five percent of
the money resulting from the rate adjustment under paragraph (a) must be used
to provide quarterly bonus payments, and to pay for associated employer costs
and other benefits as specified in Minnesota Statutes, section 256B.434, subdivision
19, paragraph (d), clauses (2) to (4), for all employees directly employed by
the nursing facility on December 31, 2008; March 31, 2009; June 30, 2009; and
September 30, 2009, except:

(1) the administrator;

(2) persons employed in the
central office of a corporation that has an ownership interest in the nursing
facility or exercises control over the nursing facility; and

(3) persons paid by the
nursing facility under a management contract.

(c) Two-thirds of the money
available under paragraph (b) must be used for an equal hourly percentage wage
bonus for all eligible employees.

(d) Nursing facilities may
apply for the portion of the rate adjustment subject to paragraphs (b) and (c),
and the commissioner shall review and act on applications, according to the
procedures specified in Minnesota Statutes, section 256B.434, subdivision 19.
The portion of the rate adjustment under paragraph (a) that is not subject to
the requirements in paragraphs (b) and (c) shall be provided to nursing
facilities effective October 1, 2008.

(e) Notwithstanding any
contrary provision in this article, this rider expires December 31, 2009.

(c)MA Long-Term Care Waivers and Home Care Grants-0-(10,643,000)

Manage
Growth in TBI and CADI Waiver.During the fiscal years
beginning on July 1, 2008, July 1, 2009, and July 1, 2010, the commissioner
shall allocate money for home and community-based programs covered under
Minnesota Statutes, section 256B.49, to ensure a reduction in state spending
that is equivalent to limiting the caseload growth of the traumatic brain
injury (TBI) waiver to 200 allocations in each year of the biennium and the
community alternatives for disabled individuals (CADI) waiver to 1,500
allocations each year of the biennium. Priorities for the allocation of funds
must be for individuals anticipated to be discharged from institutional
settings or who are at imminent risk of a placement in an institutional
setting. Notwithstanding any contrary section in this article, this provision
expires June 30, 2011.

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20082009

(d)Mental Health Grants-0-(4,823,000)

Base
Adjustment.This reduction is onetime.

Funding
Usage.Up to 75 percent of the
fiscal year 2010 appropriation for adult mental health grants may be used to
fund calendar year 2009 allocations for these programs, with the resulting
calendar year funding pattern continuing into the future.

(e)Chemical Dependency Entitlement Grants-0-(2,069,000)

Payments
for Substance Abuse Treatment.For services provided in
fiscal year 2009, county-negotiated rates and provider claims to the
consolidated chemical dependency fund must not exceed rates charged for
services in excess of those in effect on May 31, 2008. If statutes authorize a
cost-of-living adjustment during fiscal year 2009, then notwithstanding any law
to the contrary, fiscal year 2009 rates may not exceed those in effect on May
31, 2008, plus any authorized cost-of-living adjustments.

Chemical
Dependency Treatment Fund Special Revenue Account.The
lesser of the balance of the consolidated chemical dependency treatment fund at
the close of the fiscal year 2008, or $2,784,000 must be transferred and
deposited into the general fund by September 1, 2008. The lesser of the balance
of the consolidated chemical dependency treatment fund at the close of the fiscal
year 2009, or $2,009,000 must be transferred and deposited into the general
fund by September 1, 2009.

(f)Chemical Dependency Nonentitlement Grants-0-1,967,000

Base Level
Adjustment.The general fund base for
chemical dependency nonentitlement treatment grants must be reduced by
$1,686,000 for fiscal year 2010 and by $1,686,000 for fiscal year 2011.

White Earth
treatment facility.$2,000,000 is appropriated
from the general fund to the commissioner of human services for a grant to the
White Earth tribe to purchase or develop one or more culturally specific
treatment programs or capital facilities, or both, designed to serve youth from
native cultures. This appropriation is onetime and is available until spent.

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20082009

Grants Reduction.Effective July 1, 2008,
base level funding for nonforecast, general fund chemical dependency
nonentitlement grants issued under this paragraph shall be reduced by 1.8
percent at the allotment level.

(g)Other Continuing Care Grants-0-(4,729,000)

Base Level Adjustment.The
general fund base is increased by $7,283,000 in fiscal year 2010 and $4,921,000
in fiscal year 2011.

Housing Access Grants.Of
the general fund appropriation, $250,000 is appropriated in fiscal year 2009
for housing access grants under Minnesota Statutes, section 256B.0658.

Funding Usage.Up
to 75 percent of the fiscal year 2010 appropriation for semi-independent living
services grants and family support grants may be used to fund calendar year
2009 allocations for these programs, with the resulting calendar year funding
pattern continuing into the future.

Grants Reduction.Effective July 1, 2008,
base level funding for nonforecast, general fund other continuing care grants
issued under this paragraph, except for HIV grants, shall be reduced by 1.8
percent at the allotment level. HIV grants shall be reduced by 1.7 percent at
the allotment level effective July 1, 2009.

Other Continuing Care Grant
Adjustments.For the fiscal year ending June 30, 2009, the commissioner may
allocate each grant affected by rate changes under this section in such a
manner across the fiscal year to achieve the necessary cost savings and
minimize disruption to grantees. To implement this paragraph, the commissioner
may waive the requirements of Laws 2007, chapter 147, article 7, section 71,
including the employee compensation-related cost requirements.

Subd. 7.State-Operated
Services

County Past Due Receivables.The commissioner is
authorized to withhold county federal administrative reimbursement when the
county of financial responsibility for cost-of-care payments due to the state
under Minnesota Statutes, section 246.54 or 253B.045, is 90 days past due. The
commissioner shall deposit the withheld federal administrative earnings for the
county into the general fund to settle the claims with the county of financial
responsibility. The process for withholding funds is governed by Minnesota
Statutes, section 256.017.

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20082009

Internet-Based
Resource.Notwithstanding Laws 2005,
First Special Session chapter 4, article 9, section 2, subdivision 10, base
level funding for the fiscal year beginning July 1, 2008, is zero for the
evidence-based practice for the treatment of methamphetamine abuse at the state-operated
services chemical dependency program at Willmar. The Internet-based resource
developed as part of the evidence-based practice must be maintained by the
commissioner.

Community
Behavioral Health Hospitals.Under Minnesota Statutes,
section 246.51, subdivision 1, a determination order for clients in the
community behavioral hospital operated by the commissioner is only required
when a client's third-party mental health coverage has been exhausted.

(a)Mental Health Services(225,000)(300,000)

(b)Minnesota Sex Offender Services-0--0-

Sex
Offender Program.Base level funding for the Minnesota sex offender program under
Minnesota Statutes, chapter 246B, is reduced by $2,329,000 for fiscal years
beginning on or after July 1, 2009. This reduction does not apply to the
portion of the per diem related to professional treatment service costs.

Sec. 4. COMMISSIONER OF HEALTH

Subdivision 1.Total
Appropriation$-0-$(3,663,000)

Appropriations by Fund

20082009

General-0-(4,130,000)

State Government

Special Revenue-0-467,000

The appropriation additions
or reductions for each purpose are shown in the following subdivisions.

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20082009

Grants
Reduction.Effective July 1, 2008, base level funding for general fund community and
family health grants issued under this paragraph shall be reduced by 1.8
percent at the allotment level.

Subd. 3.Policy,
Quality, and Compliance

Appropriations by Fund

General-0-(2,070,000)

State Government

Special Revenue-0-32,000

Grants
Reduction.Effective July 1, 2008, base level funding for general fund policy, quality,
and compliance grants issued under this paragraph, excluding medical education
and research costs transition funding grants to the Mayo Clinic, shall be
reduced by 1.8 percent at the allotment level.

Interpreter
Services Quality Initiative.Of the state government
special revenue fund appropriation, $32,000 in fiscal year 2009 is for the
interpreter services quality initiative under Minnesota Statutes, section
144.058.

MERC
Federal Compliance.Notwithstanding Laws 2007,
chapter 147, article 19, section 4, subdivision 3, the general fund
appropriation in fiscal year 2009 for the commissioner to distribute to the
Mayo Clinic for the purpose of providing transition funding while federal
compliance changes are made to the medical education and research cost funding
distribution formula in Minnesota Statutes, section 62J.692, shall be
$4,250,000. Base level funding for this activity for fiscal years 2010 and 2011
shall be $1,000,000 each year. This funding shall not become part of the base
in 2012 and 2013. Notwithstanding any contrary provision of this article, this
rider expires on June 30, 2012.

Base
Adjustment.The state government special
revenue base is decreased by $11,000 in both fiscal years 2010 and 2011.

Subd. 4.Health
Protection

Appropriations by Fund

General-0-(40,000)

State Government

Special Revenue-0-435,000

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20082009

Grants
Reduction.Effective July 1, 2008, base level funding for general fund health
protection grants issued under this paragraph shall be reduced by 1.8 percent
at the allotment level.

Inspection
Delegation.$435,000 from the state
government special revenue fund in fiscal year 2009 is for the St. Louis County
inspection delegation. The base funding for this appropriation shall increase
by $89,000 in each of fiscal years 2010 and 2011.

Subd. 5.Minority
and Multicultural Health-0-(77,000)

Grants
Reduction.Effective July 1, 2008, base level funding for general fund minority and
multicultural health grants issued under this paragraph shall be reduced by 1.8
percent at the allotment level.

Subd. 6.Administrative
Support Services0(1,100,000)

Base
Adjustment.The general fund base is increased $46,000 in fiscal years 2010 and
2011.

Sec. 5. HEALTH RELATED BOARDS

Subdivision 1.Total
Appropriation$114,000$200,000

Appropriations by Fund

20082009

General-0--0-

State Government

Special Revenue114,000200,000

Transfer
from Special Revenue Fund.During the fiscal year beginning July 1, 2008,
the commissioner of finance shall transfer $3,219,000 from the state government
special revenue fund to the general fund.

Subd. 2.Board
of Nursing Home Administrators

State Government Special
Revenue100,000200,000

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20082009

Administrative
Services Unit.The amounts appropriated are for the administrative services unit
to pay for costs of contested case hearings and other unanticipated costs of
legal proceedings involving health-related boards funded under Laws 2007,
chapter 147, article 19, section 6. Upon certification of a health-related
board to the administrative services unit that the costs will be incurred and
that there is insufficient money available to pay for the costs out of money
currently available to that board, the administrative services unit is
authorized to transfer money from this appropriation to the board for payment
of those costs with the approval of the commissioner of finance. This
appropriation does not cancel. Any unencumbered and unspent balances remain
available for these expenditures in subsequent fiscal years.

Subd. 3.Board
of Marriage and Family Therapy

State Government Special
Revenue14,000-0-

Sec. 6. EMERGENCY
MEDICAL SERVICES BOARD

Longevity
Award and Incentive Program.For the fiscal year
beginning July 1, 2008, $6,200,000 must be transferred from the ambulance
service personnel longevity award and incentive trust to the general fund.

The amounts that may be
spent from this appropriation for each purpose are as follows:

(a) MFIP/DWP Grants

Appropriations by Fund

General62,069,00062,405,000

Federal TANF75,904,00080,841,000

(b) Support Services Grants

Appropriations by Fund

General8,715,0008,715,000

Federal TANF113,429,000115,902,000

Journal
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APPROPRIATIONS

Available for the Year

Ending June 30

20082009

TANF Prior
Appropriation Cancellation. Notwithstanding Laws 2001, First Special Session
chapter 9, article 17, section 2, subdivision 11, paragraph (b), any unexpended
TANF funds appropriated to the commissioner to contract with the Board of
Trustees of Minnesota State Colleges and Universities, to provide tuition
waivers to employees of health care and human service providers that are
members of qualifying consortia operating under Minnesota Statutes, sections
116L.10 to 116L.15, must cancel at the end of fiscal year 2007.

MFIP Pilot
Program. Of
the TANF appropriation, $100,000 in fiscal year 2008 and $750,000 in fiscal
year 2009 are for a grant to the Stearns-Benton Employment and Training Council
for the Workforce U pilot program. Base level funding for this program shall be
$750,000 in 2010 and $0 in 2011.

Supported
Work. (1)
Of the TANF appropriation, $5,468,000 in fiscal year 2008 and $7,291,000 in
fiscal year 2009 areis for supported work for MFIP participants, to
be allocated to counties and tribes based on the criteria under clauses (2) and
(3), and is available until expended. Paid transitional work experience
and other supported employment under this rider provides a continuum of
employment assistance, including outreach and recruitment, program orientation
and intake, testing and assessment, job development and marketing, preworksite
training, supported worksite experience, job coaching, and postplacement
follow-up, in addition to extensive case management and referral services.
* (The preceding text "and $7,291,000 in fiscal year 2009" was
indicated as vetoed by the governor.)

(2) A county or tribe is
eligible to receive an allocation under this rider if:

(i) the county or tribe is
not meeting the federal work participation rate;

(ii) the county or tribe has
participants who are required to perform work activities under Minnesota
Statutes, chapter 256J, but are not meeting hourly work requirements; and

(iii) the county or tribe
has assessed participants who have completed six weeks of job search or are
required to perform work activities and are not meeting the hourly
requirements, and the county or tribe has determined that the participant would
benefit from working in a supported work environment.

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APPROPRIATIONS

Available for the Year

Ending June 30

20082009

(3) A county or tribe may also be eligible for funds
in order to contract for supplemental hours of paid work at the participant's
child's place of education, child care location, or the child's physical or
mental health treatment facility or office. This grant to counties and tribes
is specifically for MFIP participants who need to work up to five hours more
per week in order to meet the hourly work requirement, and the participant's
employer cannot or will not offer more hours to the participant.

Work Study. Of the TANF appropriation,
$750,000 each year are to the commissioner to contract with the Minnesota
Office of Higher Education for the biennium beginning July 1, 2007, for work
study grants under Minnesota Statutes, section 136A.233, specifically for
low-income individuals who receive assistance under Minnesota Statutes, chapter
256J, and for grants to opportunities industrialization centers. * (The
preceding text beginning "Work Study. Of the TANF appropriation," was
indicated as vetoed by the governor.)

Integrated Service Projects.
$2,500,000
in fiscal year 2008 and $2,500,000 in fiscal year 2009 are appropriated from
the TANF fund to the commissioner to continue to fund the existing integrated
services projects for MFIP families, and if funding allows, additional similar
projects.

Base Adjustment. The TANF base for fiscal
year 2010 is $115,902,000 and for fiscal year 2011 is $115,152,000.

(c) MFIP Child Care Assistance Grants

General74,654,00071,951,000

(d) Basic Sliding Fee Child Care Assistance Grants

General42,995,00045,008,000

Base Adjustment. The general fund base is $44,881,000
for fiscal year 2010 and $44,852,000 for fiscal year 2011.

At-Home Infant Care Program.
No funding
shall be allocated to or spent on the at-home infant care program under
Minnesota Statutes, section 119B.035.

(e) Child Care Development Grants

General4,390,0006,390,000

Journal
of the House - 119th Day - Sunday, May 18, 2008 - Top of Page 12713

APPROPRIATIONS

Available for the Year

Ending June 30

20082009

Prekindergarten
Exploratory Projects. Of the general fund appropriation, $2,000,000 the first year and
$4,000,000 the second year are for grants to the city of St. Paul, Hennepin
County, and Blue Earth County to establish scholarship demonstration projects
to be conducted in partnership with the Minnesota Early Learning Foundation to
promote children's school readiness. This appropriation is available until June
30, 2009.

Child Care
Services Grants. Of this appropriation, $500,000 each year are for the purpose of
providing child care services grants under Minnesota Statutes, section 119B.21,
subdivision 5. This appropriation is for the 2008-2009 biennium only, and does
not increase the base funding.

Early
Childhood Professional Development System. Of this appropriation, $500,000 each year are
for purposes of the early childhood professional development system, which
increases the quality and continuum of professional development opportunities
for child care practitioners. This appropriation is for the 2008-2009 biennium
only, and does not increase the base funding.

Base
Adjustment. The
general fund base is $1,515,000 for each of fiscal years 2010 and 2011.

(f) Child Support Enforcement Grants

General11,038,0003,705,000

Child Support
Enforcement. $7,333,000
for fiscal year 2008 is to make grants to counties for child support
enforcement programs to make up for the loss under the 2005 federal Deficit
Reduction Act of federal matching funds for federal incentive funds passed on
to the counties by the state.

This appropriation is
available until June 30, 2009.

(g) Children's Services Grants

Appropriations by Fund

General63,647,00071,147,000

Health Care Access250,000-0-

TANF240,000340,000

Journal
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APPROPRIATIONS

Available for the Year

Ending June 30

20082009

Grants for
Programs Serving Young Parents. Of the TANF fund appropriation, $140,000 each year
is for a grant to a program or programs that provide comprehensive services
through a private, nonprofit agency to young parents in Hennepin County who
have dropped out of school and are receiving public assistance. The program
administrator shall report annually to the commissioner on skills development,
education, job training, and job placement outcomes for program participants.

County
Allocations for Rate Increases. County Children and Community Services Act
allocations shall be increased by $197,000 effective October 1, 2007, and
$696,000 effective October 1, 2008, to help counties pay for the rate
adjustments to day training and habilitation providers for participants paid by
county social service funds. Notwithstanding the provisions of Minnesota
Statutes, section 256M.40, the allocation to a county shall be based on the
county's proportion of social services spending for day training and
habilitation services as determined in the most recent social services
expenditure and grant reconciliation report.

Adoption
Assistance Incentive Grants. Federal funds available during fiscal year 2008 and
fiscal year 2009 for the adoption incentive grants are appropriated to the
commissioner for these purposes.

Adoption
Assistance and Relative Custody Assistance. The commissioner may transfer unencumbered
appropriation balances for adoption assistance and relative custody assistance
between fiscal years and between programs.

Children's
Mental Health Grants. Of the general fund appropriation, $5,913,000 in fiscal year 2008 and
$6,825,000 in fiscal year 2009 are for children's mental health grants. The
purpose of these grants is to increase and maintain the state's children's
mental health service capacity, especially for school-based mental health
services. The commissioner shall require grantees to utilize all available
third party reimbursement sources as a condition of using state grant funds. At
least 15 percent of these funds shall be used to encourage efficiencies through
early intervention services. At least another 15 percent shall be used to provide
respite care services for children with severe emotional disturbance at risk of
out-of-home placement.

Journal
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APPROPRIATIONS

Available for the Year

Ending June 30

20082009

Mental Health
Crisis Services. Of the general fund appropriation, $2,528,000 in fiscal year 2008 and
$2,850,000 in fiscal year 2009 are for statewide funding of children's mental
health crisis services. Providers must utilize all available funding streams.

Children's
Mental Health Evidence-Based and Best Practices. Of the general fund
appropriation, $375,000 in fiscal year 2008 and $750,000 in fiscal year 2009
are for children's mental health evidence-based and best practices including,
but not limited to: Adolescent Integrated Dual Diagnosis Treatment services;
school-based mental health services; co-location of mental health and physical
health care, and; the use of technological resources to better inform diagnosis
and development of treatment plan development by mental health professionals.
The commissioner shall require grantees to utilize all available third-party
reimbursement sources as a condition of using state grant funds.

Culturally
Specific Mental Health Treatment Grants. Of the general fund appropriation, $75,000 in
fiscal year 2008 and $300,000 in fiscal year 2009 are for children's mental
health grants to support increased availability of mental health services for
persons from cultural and ethnic minorities within the state. The commissioner
shall use at least 20 percent of these funds to help members of cultural and
ethnic minority communities to become qualified mental health professionals and
practitioners. The commissioner shall assist grantees to meet third-party
credentialing requirements and require them to utilize all available
third-party reimbursement sources as a condition of using state grant funds.

Mental Health
Services for Children with Special Treatment Needs. Of the general fund
appropriation, $50,000 in fiscal year 2008 and $200,000 in fiscal year 2009 are
for children's mental health grants to support increased availability of mental
health services for children with special treatment needs. These shall include,
but not be limited to: victims of trauma, including children subjected to abuse
or neglect, veterans and their families, and refugee populations; persons with
complex treatment needs, such as eating disorders; and those with low incidence
disorders.

MFIP and
Children's Mental Health Pilot Project. Of the TANF appropriation, $100,000 in fiscal year
2008 and $200,000 in fiscal year 2009 are to fund the MFIP and children's
mental health pilot project. Of these amounts, up to $100,000 may be expended
on evaluation of this pilot.

Journal
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APPROPRIATIONS

Available for the Year

Ending June 30

20082009

Prenatal
Alcohol or Drug Use. Of the general fund appropriation, $75,000 each year is to award grants
beginning July 1, 2007, to programs that provide services under Minnesota
Statutes, section 254A.171, in Pine, Kanabec, and Carlton Counties. This
appropriation shall become part of the base appropriation.

Base
Adjustment. The
general fund base is $62,572,000 in fiscal year 2010 and $62,575,000 in fiscal
year 2011.

(h) Children and Community Services Grants

General101,369,00069,208,000

Base
Adjustment. The
general fund base is $69,274,000 in each of fiscal years 2010 and 2011.

Targeted Case
Management Temporary Funding. (a) Of the general fund appropriation, $32,667,000
in fiscal year 2008 is transferred to the targeted case management contingency
reserve account in the general fund to be allocated to counties and tribes
affected by reductions in targeted case management federal Medicaid revenue as
a result of the provisions in the federal Deficit Reduction Act of 2005, Public
Law 109-171.

(b) Contingent upon (1)
publication by the federal Centers for Medicare and Medicaid Services of final
regulations implementing the targeted case management provisions of the federal
Deficit Reduction Act of 2005, Public Law 109-171, or (2) the issuance of a
finding by the Centers for Medicare and Medicaid Services of federal Medicaid
overpayments for targeted case management expenditures, up to $32,667,000 is
appropriated to the commissioner of human services. Prior to distribution of
funds, the commissioner shall estimate and certify the amount by which the
federal regulations or federal disallowance will reduce targeted case management
Medicaid revenue over the 2008-2009 biennium.

(c) Within 60 days of a
contingency described in paragraph (b), the commissioner shall distribute the
grants proportionate to each affected county or tribe's targeted case
management federal earnings for calendar year 2005, not to exceed the lower of
(1) the amount of the estimated reduction in federal revenue or (2)
$32,667,000.

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APPROPRIATIONS

Available for the Year

Ending June 30

20082009

(d) These funds are
available in either year of the biennium. Counties and tribes shall use these
funds to pay for social service-related costs, but the funds are not subject to
provisions of the Children and Community Services Act grant under Minnesota
Statutes, chapter 256M.

(e) This appropriation shall
be available to pay counties and tribes for expenses incurred on or after July
1, 2007. The appropriation shall be available until expended.

(i) General Assistance Grants

General37,876,00038,253,000

General
Assistance Standard. The commissioner shall set the monthly standard of assistance for
general assistance units consisting of an adult recipient who is childless and
unmarried or living apart from parents or a legal guardian at $203. The
commissioner may reduce this amount according to Laws 1997, chapter 85, article
3, section 54.

Emergency
General Assistance. The amount appropriated for emergency general assistance funds is
limited to no more than $7,889,812 in fiscal year 2008 and $7,889,812 in fiscal
year 2009. Funds to counties must be allocated by the commissioner using the
allocation method specified in Minnesota Statutes, section 256D.06.

(j) Minnesota Supplemental Aid Grants

General30,505,00030,812,000

Emergency
Minnesota Supplemental Aid Funds. The amount appropriated for emergency Minnesota
supplemental aid funds is limited to no more than $1,100,000 in fiscal year
2008 and $1,100,000 in fiscal year 2009. Funds to counties must be allocated by
the commissioner using the allocation method specified in Minnesota Statutes,
section 256D.46.

(k) Group Residential Housing Grants

General91,069,00098,671,000

Journal
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APPROPRIATIONS

Available for the Year

Ending June 30

20082009

People
Incorporated. Of
the general fund appropriation, $460,000 each year is to augment community
support and mental health services provided to individuals residing in
facilities under Minnesota Statutes, section 256I.05, subdivision 1m.

(l) Other Children and Economic Assistance Grants

General20,183,00016,333,000

Federal TANF1,500,0001,500,000

Base
Adjustment. The
general fund base shall be $16,033,000 in fiscal year 2010 and $15,533,000 in
fiscal year 2011. The TANF base shall be $1,500,000 in fiscal year 2010 and
$1,181,000 in fiscal year 2011.

Homeless and
Runaway Youth. Of the general fund appropriation, $500,000 each year are for the
Runaway and Homeless Youth Act under Minnesota Statutes, section 256K.45. Funds
shall be spent in each area of the continuum of care to ensure that programs
are meeting the greatest need. This is a onetime appropriation.

Long-Term
Homelessness. Of
the general fund appropriation, $1,500,000 each year are $2,000,000
in fiscal year 2008 is for implementation of programs to address long-term
homelessness and is available in either year of the biennium. This is a
onetime appropriation.

Minnesota
Community Action Grants. (a) Of the general fund appropriation, $250,000 each year is for the
purposes of Minnesota community action grants under Minnesota Statutes,
sections 256E.30 to 256E.32. This is a onetime appropriation.

(b) Of the TANF
appropriation, $1,500,000 each year is for community action agencies for auto
repairs, auto loans, and auto purchase grants to individuals who are eligible
to receive benefits under Minnesota Statutes, chapter 256J, or who have lost
eligibility for benefits under Minnesota Statutes, chapter 256J, due to
earnings in the prior 12 months. Base level funding for this activity shall be
$1,500,000 in fiscal year 2010 and $1,181,000 in fiscal year 2011. * (The
preceding text beginning "(b) Of the TANF appropriation," was indicated
as vetoed by the governor.)

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APPROPRIATIONS

Available for the Year

Ending June 30

20082009

(c) Money appropriated under
paragraphs (a) and (b) that is not spent in the first year does not cancel but
is available for the second year.

Sec. 8. SUNSET OF UNCODIFIED
LANGUAGE.

All uncodified language contained in this article expires on June 30,
2009, unless a different expiration date is specified.

The
dollar amounts shown are added to or, if shown in parentheses, are subtracted
from the appropriations in Laws 2007, chapter 147, from the general fund, or
any other fund named, to the Department of Human Services for the purposes
specified in this article, to be available for the fiscal year indicated for
each purpose. The figure "2008" used in this article means that the
appropriation or appropriations listed are available for the fiscal year ending
June 30, 2008. The figure "2009" used in this article means that the
appropriation or appropriations listed are available for the fiscal year ending
June 30, 2009. Supplemental appropriations and reductions to appropriations for
the fiscal year ending June 30, 2008, are effective the day following final
enactment.

20082009

General$6,739,000$52,350,000

Health Care Access(84,156,000)(96,019,000)

Federal TANF(28,427,000)(7,441,000)

Total$(105,844,000)$(51,110,000)

Sec. 2. COMMISSIONER
OF HUMAN SERVICES

Subdivision 1.Total
Appropriation$(105,844,000)$(51,110,000)

Appropriations by Fund

20082009

General6,739,00052,350,000

Health Care Access(84,156,000)(96,019,000)

Federal TANF(28,427,000)(7,441,000)

Journal of the House - 119th
Day - Sunday, May 18, 2008 - Top of Page 12720

Subd. 2.Revenue and Pass-Through

Federal TANF1,187,0001,507,000

Subd. 3.Children
and Economic Assistance Grants

General(4,960,000)5,925,000

Federal TANF(29,614,000)(8,948,000)

The amounts that may be
spent from this appropriation for each purpose are as follows:

(a)MFIP/DWP Grants

General25,139,00011,665,000

Federal TANF(29,614,000)(8,948,000)

(b)MFIP Child Care Assistance Grants(26,141,000)(10,710,000)

(c)General Assistance Grants2,529,0006,033,000

(d)Minnesota Supplemental Aid Grants299,000500,000

(e)Group Residential Housing Grants(6,786,000)(1,563,000)

Subd. 4.Basic
Health Care Grants

General30,075,00048,389,000

Health Care Access(84,156,000)(96,019,000)

The amounts that may be spent
from this appropriation for each purpose are as follows:

(a)MinnesotaCare

Health Care Access(84,156,000)(96,019,000)

(b)MA Basic Health Care - Families and Children13,525,0007,005,000

(c)MA Basic Health Care - Elderly and Disabled(2,292,000)5,479,000

(d)General Assistance Medical Care18,842,00035,905,000

Subd. 5.Continuing
Care Grants(18,376,000)(1,964,000)

The amounts that may be
spent from this appropriation for each purpose are as follows:

Journal of the House - 119th
Day - Sunday, May 18, 2008 - Top of Page 12721

Subd. 2. Homeowners. A claimant whose property
taxes payable are in excess of the percentage of the household income stated
below shall pay an amount equal to the percent of income shown for the
appropriate household income level along with the percent to be paid by the
claimant of the remaining amount of property taxes payable. The state refund
equals the amount of property taxes payable that remain, up to the state refund
amount shown below.

Household
IncomePercent of IncomePercent Paid by ClaimantMaximum State Refund

$0 to 1,1891.0
percent15
percent$1,450$1,850

1,190 to 2,3791.1
percent15
percent$1,450$1,850

2,380 to 3,5891.2
percent15
percent$1,410$1,800

3,590 to 4,7891.3
percent20
percent$1,410$1,800

4,790 to 5,9791.4
percent20
percent$1,360$1,730

5,980 to 8,3691.5
percent20
percent$1,360$1,730

8,370 to 9,5591.6
percent25
percent$1,310$1,670

9,560 to 10,7591.7
percent25
percent$1,310$1,670

10,760 to 11,9491.8
percent25
percent$1,260$1,610

11,950 to 13,1391.9
percent30
percent$1,260$1,610

13,140 to 14,3492.0
percent30
percent$1,210$1,540

14,350 to 16,7392.1
percent30
percent$1,210$1,540

16,740 to 17,9292.2
percent35
percent$1,160$1,480

17,930 to 19,1192.3
percent35
percent$1,160$1,480

19,120 to 20,3192.4
percent35
percent$1,110$1,420

20,320 to 25,0992.5
percent40
percent$1,110$1,420

25,100 to 28,6792.6
percent40
percent$1,070$1,360

28,680 to 35,8492.7
percent40
percent$1,070$1,360

35,850 to 41,8192.8
percent45
percent$970$1,240

41,820 to 47,7993.0
percent45
percent$970$1,240

47,800 to 53,7793.2
percent45
percent$870$1,110

53,780 to 59,7493.5
percent50
percent$780$990

59,750 to 65,7294.03.5 percent50
percent$680$870

65,730 to 69,3194.03.5 percent50
percent$580$740

69,320 to 71,7194.03.5 percent50
percent$480$610

71,720 to 74,6194.03.5 percent50
percent$390$500

74,620 to 77,5194.03.5 percent50
percent$290$370

The payment made to a claimant shall be the amount of the state
refund calculated under this subdivision. No payment is allowed if the
claimant's household income is $77,520 or more.

EFFECTIVE DATE.This section is
effective beginning with refunds based on property taxes payable in 2009.

Journal of the House - 119th
Day - Sunday, May 18, 2008 - Top of Page 12727

Sec. 2. TAXPAYER ASSISTANCE SERVICES; PROPERTY
TAX REFUND.

(a) $100,000 in fiscal year 2009 is appropriated
from the general fund to the commissioner of revenue to make grants to one or more
nonprofit organizations, qualifying under section 501(c)(3) of the Internal
Revenue Code of 1986, to coordinate, facilitate, encourage, and aid in the
provision of taxpayer assistance services. The commissioner must award grants
under this section so as to increase the availability of taxpayer assistance
services after April 15, to assist homeowners in filing claims for the property
tax refund, and to increase participation in the program. This appropriation is
onetime and is not added to the agency's base budget.

(b) "Taxpayer assistance services" means
accounting and tax preparation services provided by volunteers to low-income
and disadvantaged Minnesota residents to help them file federal and state
income tax returns, Minnesota property tax refund claims, and may include
provision of personal representation before the Department of Revenue and
Internal Revenue Service.

Subd. 34. City
revenue need. (a) For a city with a population equal to or greater than
2,500, "city revenue need" is the sum of (1) 5.0734098 times the
pre-1940 housing percentage; plus (2) 19.141678 times the population decline
percentage; plus (3) 2504.06334 times the road accidents factor; plus (4)
355.0547; minus (5) the metropolitan area factor; minus (6) 49.10638 times the
household size.

(b) For a city with a population less than 2,500,
"city revenue need" is the sum of (1) 2.387 times the pre-1940 housing
percentage; plus (2) 2.67591 times the commercial industrial percentage; plus
(3) 3.16042 times the population decline percentage; plus (4) 1.206 times the
transformed population; minus (5) 62.772.

(c) For a city with a population of 2,500 or more and
a population in one of the most recently available five years that was less
than 2,500, "city revenue need" is the sum of (1) its city revenue
need calculated under paragraph (a) multiplied by its transition factor; plus
(2) its city revenue need calculated under the formula in paragraph (b)
multiplied by the difference between one and its transition factor. For
purposes of this paragraph, a city's "transition factor" is equal to
0.2 multiplied by the number of years that the city's population estimate has
been 2,500 or more. This provision only applies for aids payable in calendar
years 2006 to 2008 to cities with a 2002 population of less than 2,500. It
applies to any city for aids payable in 2009 and thereafter. The city
revenue need under this paragraph may not be less than 285.

(d) The city revenue need cannot be less than zero.

(e) For calendar year 2005 and subsequent years, the
city revenue need for a city, as determined in paragraphs (a) to (d), is
multiplied by the ratio of the annual implicit price deflator for government
consumption expenditures and gross investment for state and local governments
as prepared by the United States Department of Commerce, for the most recently
available year to the 2003 implicit price deflator for state and local
government purchases.

EFFECTIVE DATE.This section is
effective for aids payable in calendar year 2009 and thereafter.

(b) The city aid base for
any city with a population less than 500 is increased by $40,000 for aids
payable in calendar year 1995 and thereafter, and the maximum amount of total
aid it may receive under section 477A.013, subdivision 9, paragraph (c), is
also increased by $40,000 for aids payable in calendar year 1995 only, provided
that:

(i) the average total tax
capacity rate for taxes payable in 1995 exceeds 200 percent;

(ii) the city portion of the
tax capacity rate exceeds 100 percent; and

(iii) its city aid base is
less than $60 per capita.

(c) The city aid base for a
city is increased by $20,000 in 1998 and thereafter and the maximum amount of
total aid it may receive under section 477A.013, subdivision 9, paragraph (c),
is also increased by $20,000 in calendar year 1998 only, provided that:

(i) the city has a
population in 1994 of 2,500 or more;

(ii) the city is located in
a county, outside of the metropolitan area, which contains a city of the first
class;

(iii) the city's net tax
capacity used in calculating its 1996 aid under section 477A.013 is less than
$400 per capita; and

(iv) at least four percent
of the total net tax capacity, for taxes payable in 1996, of property located
in the city is classified as railroad property.

(d) The city aid base for a
city is increased by $200,000 in 1999 and thereafter and the maximum amount of
total aid it may receive under section 477A.013, subdivision 9, paragraph (c),
is also increased by $200,000 in calendar year 1999 only, provided that:

(i) the city was
incorporated as a statutory city after December 1, 1993;

(ii) its city aid base does
not exceed $5,600; and

(iii) the city had a
population in 1996 of 5,000 or more.

(e) The city aid base for a
city is increased by $450,000 in 1999 to 2008 and the maximum amount of total
aid it may receive under section 477A.013, subdivision 9, paragraph (c), is
also increased by $450,000 in calendar year 1999 only, provided that:

(i) the city had a
population in 1996 of at least 50,000;

(ii) its population had
increased by at least 40 percent in the ten-year period ending in 1996; and

(iii) its city's net tax
capacity for aids payable in 1998 is less than $700 per capita.

(f) (e) The city aid base for a
city is increased by $150,000 for aids payable in 2000 and thereafter, and the
maximum amount of total aid it may receive under section 477A.013, subdivision
9, paragraph (c), is also increased by $150,000 in calendar year 2000 only,
provided that:

(1) the city has a
population that is greater than 1,000 and less than 2,500;

Journal of the House - 119th
Day - Sunday, May 18, 2008 - Top of Page 12729

(2) its commercial
and industrial percentage for aids payable in 1999 is greater than 45 percent;
and

(3) the total market value of all commercial and
industrial property in the city for assessment year 1999 is at least 15 percent
less than the total market value of all commercial and industrial property in
the city for assessment year 1998.

(g) (f) The city aid base for a city is increased by
$200,000 in 2000 and thereafter, and the maximum amount of total aid it may
receive under section 477A.013, subdivision 9, paragraph (c), is also increased
by $200,000 in calendar year 2000 only, provided that:

(1) the city had a population in 1997 of 2,500 or
more;

(2) the net tax capacity of the city used in
calculating its 1999 aid under section 477A.013 is less than $650 per capita;

(3) the pre-1940 housing percentage of the city used
in calculating 1999 aid under section 477A.013 is greater than 12 percent;

(4) the 1999 local government aid of the city under
section 477A.013 is less than 20 percent of the amount that the formula aid of
the city would have been if the need increase percentage was 100 percent; and

(5) the city aid base of the city used in
calculating aid under section 477A.013 is less than $7 per capita.

(h) (g) The city aid base for a city is increased by
$102,000 in 2000 and thereafter, and the maximum amount of total aid it may receive
under section 477A.013, subdivision 9, paragraph (c), is also increased by
$102,000 in calendar year 2000 only, provided that:

(1) the city has a population in 1997 of 2,000 or
more;

(2) the net tax capacity of the city used in
calculating its 1999 aid under section 477A.013 is less than $455 per capita;

(3) the net levy of the city used in calculating
1999 aid under section 477A.013 is greater than $195 per capita; and

(4) the 1999 local government aid of the city under
section 477A.013 is less than 38 percent of the amount that the formula aid of
the city would have been if the need increase percentage was 100 percent.

(i) (h) The city aid base for a city is increased by
$32,000 in 2001 and thereafter, and the maximum amount of total aid it may
receive under section 477A.013, subdivision 9, paragraph (c), is also increased
by $32,000 in calendar year 2001 only, provided that:

(1) the city has a population in 1998 that is
greater than 200 but less than 500;

(2) the city's revenue need used in calculating aids
payable in 2000 was greater than $200 per capita;

(3) the city net tax capacity for the city used in
calculating aids available in 2000 was equal to or less than $200 per capita;

(4) the city aid base of the city used in
calculating aid under section 477A.013 is less than $65 per capita; and

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(5) the city's
formula aid for aids payable in 2000 was greater than zero.

(j) (i) The city aid base for a
city is increased by $7,200 in 2001 and thereafter, and the maximum amount of
total aid it may receive under section 477A.013, subdivision 9, paragraph (c),
is also increased by $7,200 in calendar year 2001 only, provided that:

(1) the city had a
population in 1998 that is greater than 200 but less than 500;

(2) the city's commercial
industrial percentage used in calculating aids payable in 2000 was less than
ten percent;

(3) more than 25 percent of
the city's population was 60 years old or older according to the 1990 census;

(4) the city aid base of the
city used in calculating aid under section 477A.013 is less than $15 per
capita; and

(5) the city's formula aid
for aids payable in 2000 was greater than zero.

(k) (j) The city aid base for a
city is increased by $45,000 in 2001 and thereafter and by an additional
$50,000 in calendar years 2002 to 2011, and the maximum amount of total aid it
may receive under section 477A.013, subdivision 9, paragraph (c), is also increased
by $45,000 in calendar year 2001 only, and by $50,000 in calendar year 2002
only, provided that:

(1) the net tax capacity of
the city used in calculating its 2000 aid under section 477A.013 is less than
$810 per capita;

(2) the population of the
city declined more than two percent between 1988 and 1998;

(3) the net levy of the city
used in calculating 2000 aid under section 477A.013 is greater than $240 per
capita; and

(4) the city received less
than $36 per capita in aid under section 477A.013, subdivision 9, for aids
payable in 2000.

(l) (k) The city aid base for a
city with a population of 10,000 or more which is located outside of the
seven-county metropolitan area is increased in 2002 and thereafter, and the maximum
amount of total aid it may receive under section 477A.013, subdivision 9,
paragraph (b) or (c), is also increased in calendar year 2002 only, by an
amount equal to the lesser of:

(1)(i) the total population
of the city, as determined by the United States Bureau of the Census, in the
2000 census, (ii) minus 5,000, (iii) times 60; or

(2) $2,500,000.

(m) (l) The city aid base is
increased by $50,000 in 2002 and thereafter, and the maximum amount of total
aid it may receive under section 477A.013, subdivision 9, paragraph (c), is
also increased by $50,000 in calendar year 2002 only, provided that:

(1) the city is located in
the seven-county metropolitan area;

(2) its population in 2000
is between 10,000 and 20,000; and

(3) its commercial industrial
percentage, as calculated for city aid payable in 2001, was greater than 25
percent.

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(n) (m) The city aid base for a
city is increased by $150,000 in calendar years 2002 to 2011 and by an
additional $75,000 in calendar years 2009 to 2014 and the maximum amount of
total aid it may receive under section 477A.013, subdivision 9, paragraph (c),
is also increased by $150,000 in calendar year 2002 only and by $75,000 in
calendar year 2009 only, provided that:

(1) the city had a population of at least 3,000 but
no more than 4,000 in 1999;

(2) its home county is located within the
seven-county metropolitan area;

(3) its pre-1940 housing percentage is less than 15
percent; and

(4) its city net tax capacity per capita for taxes
payable in 2000 is less than $900 per capita.

(o) (n) The city aid base for a city is increased by
$200,000 beginning in calendar year 2003 and the maximum amount of total aid it
may receive under section 477A.013, subdivision 9, paragraph (c), is also
increased by $200,000 in calendar year 2003 only, provided that the city
qualified for an increase in homestead and agricultural credit aid under Laws
1995, chapter 264, article 8, section 18.

(p) (o) The city aid base for a city is increased by
$200,000 in 2004 only and the maximum amount of total aid it may receive under
section 477A.013, subdivision 9, is also increased by $200,000 in calendar year
2004 only, if the city is the site of a nuclear dry cask storage facility.

(q) (p) The city aid base for a city is increased by
$10,000 in 2004 and thereafter and the maximum total aid it may receive under
section 477A.013, subdivision 9, is also increased by $10,000 in calendar year
2004 only, if the city was included in a federal major disaster designation
issued on April 1, 1998, and its pre-1940 housing stock was decreased by more
than 40 percent between 1990 and 2000.

(r) (q) The city aid base for a city is increased by
$30,000 in 2009 and thereafter and the maximum total aid it may receive under
section 477A.013, subdivision 9, is also increased by $25,000 in calendar year
2006 only if the city had a population in 2003 of at least 1,000 and has a
state park for which the city provides rescue services and which comprised at
least 14 percent of the total geographic area included within the city
boundaries in 2000.

(s) The city aid base for a city with a population
less than 5,000 is increased in 2006 and thereafter and the minimum and maximum
amount of total aid it may receive under this section is also increased in
calendar year 2006 only by an amount equal to $6 multiplied by its population.

(t) (r) The city aid base for a city is increased by
$80,000 in 2009 and thereafter and the minimum and maximum amount of total aid
it may receive under section 477A.013, subdivision 9, is also increased by
$80,000 in calendar year 2009 only, if:

(1) as of May 1, 2006, at least 25 percent of the
tax capacity of the city is proposed to be placed in trust status as tax-exempt
Indian land;

(2) the placement of the land is being challenged
administratively or in court; and

(3) due to the challenge, the land proposed to be
placed in trust is still on the tax rolls as of May 1, 2006.

(u) (s) The city aid base for a city is increased by
$100,000 in 2007 and thereafter and the minimum and maximum total amount of aid
it may receive under this section is also increased in calendar year 2007 only,
provided that:

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(1) the city has a
2004 estimated population greater than 200 but less than 2,000;

(2) its city net tax
capacity for aids payable in 2006 was less than $300 per capita;

(3) the ratio of its pay
2005 tax levy compared to its city net tax capacity for aids payable in 2006
was greater than 110 percent; and

(4) it is located in a
county where at least 15,000 acres of land are classified as tax-exempt Indian
reservations according to the 2004 abstract of tax-exempt property.

(v) (t) The city aid base for a
city is increased by $30,000 in 2009 only, and the maximum total aid it may
receive under section 477A.013, subdivision 9, is also increased by $30,000 in
calendar year 2009, only if the city had a population in 2005 of less than
3,000 and the city's boundaries as of 2007 were formed by the consolidation of
two cities and one township in 2002.

(u) The city aid base for a
city is increased by $100,000 in 2009 and thereafter, and the maximum total aid
it may receive under section 477A.013, subdivision 9, is also increased by
$100,000 in calendar year 2009 only, if the city had a city net tax capacity
for aids payable in 2007 of less than $150 per capita and the city experienced
flooding on March 14, 2007, that resulted in evacuation of at least 40 homes.

(v) The city aid base for a
city is increased by $100,000 in 2009 to 2013, and the maximum total aid it may
receive under section 477A.013, subdivision 9, is also increased by $100,000 in
calendar year 2009 only, if the city:

(1) is located outside of
the Minneapolis-St. Paul standard metropolitan statistical area;

(2) has a 2005 population
greater than 7,000 but less than 8,000; and

(3) has a 2005 net tax
capacity per capita of less than $500.

(w) The city aid base is
increased by $25,000 in calendar years 2009 to 2013 and the maximum amount of
total aid it may receive under section 477A.013, subdivision 9, is increased by
$25,000 in calendar year 2009 only, provided that:

(1) the city is located in
the seven-county metropolitan area;

(2) its population in 2006
is less than 200; and

(3) the percentage of its
housing stock built before 1940, according to the 2000 United States Census, is
greater than 40 percent.

(x) The city aid base is
increased by $90,000 in calendar year 2009 only and the minimum and maximum
total amount of aid it may receive under section 477A.013, subdivision 9, is
also increased by $90,000 in calendar year 2009 only, provided that the city is
located in the seven-county metropolitan area, has a 2006 population between
5,000 and 7,000 and has a 1997 population of over 7,000.

EFFECTIVE DATE.This section is
effective for aids payable in calendar year 2009 and thereafter.

Subd. 41.Small city aid base.(a) "Small city aid base"
for a city with a population less than 5,000 is equal to $8.50 multiplied by
its population. The small city aid base for all other cities is equal to zero.

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(b) For calendar
year 2010 and subsequent years, the small city aid base for a city, as
determined in paragraph (a), is multiplied by the ratio of the appropriation
under section 477A.03, subdivision 2a, for the year in which the aid is paid to
the appropriation under that section for aids payable in 2009.

EFFECTIVE DATE.This section is
effective for aids payable in calendar year 2009 and thereafter.

Subd. 42.City jobs
base.(a) "City jobs base" for a city with a population of
5,000 or more is equal to the product of (1) $25.20, (2) the number of jobs per
capita in the city, and (3) its population. For cities with a population less
than 5,000, the city jobs base is equal to zero. For a city receiving aid under
section 477A.011, subdivision 36, paragraph (l), its city jobs base is reduced
by the lesser of 36 percent of the amount of aid received under that paragraph
or $1,000,000. No city's city jobs base may exceed $4,725,000 under this
paragraph.

(b) For calendar year 2010 and subsequent years, the
city jobs base for a city, as determined in paragraph (a), is multiplied by the
ratio of the appropriation under section 477A.03, subdivision 2a, for the year
in which the aid is paid to the appropriation under that section for aids
payable in 2009.

(c) For purposes of this subdivision, "jobs per
capita in the city" means (1) the average annual number of employees in
the city based on the data from the Quarterly Census of Employment and Wages,
as reported by the Department of Employment and Economic Development, for the
most recent calendar year available as of May 1, 2008, divided by (2) the
city's population for the same calendar year as the employment data. The
commissioner of the Department of Employment and Economic Development shall
certify to the city the average annual number of employees for each city by
June 1, 2008. A city may challenge an estimate under this paragraph by filing
its specific objection, including the names of employers that it feels may have
misreported data, in writing with the commissioner by June 20, 2008. The commissioner
shall make every reasonable effort to address the specific objection and adjust
the data as necessary. The commissioner shall certify the estimates of the
annual employment to the commissioner of revenue by July 15, 2008, including
any estimates still under objection.

EFFECTIVE DATE.This section is
effective for aids payable in calendar year 2009 and thereafter.

Subd. 43.Unmet
need."Unmet need" for a city is equal to the difference
between (1) its city revenue need multiplied by its population, and (2) its
city net tax capacity multiplied by the tax effort rate.

EFFECTIVE DATE.This section is
effective for aids payable in calendar year 2009 and thereafter.

Subd. 5. County
transition aid. (a) For 2005, a county is eligible for transition aid
equal to the amount, if any, by which:

(1) the difference between:

(i) the aid the county received under subdivision 1
in 2004, divided by the total aid paid to all counties under subdivision 1,
multiplied by $205,000,000; and

(ii) the amount of aid the county is certified to
receive in 2005 under subdivisions 3 and 4;

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exceeds:

(2) three percent of the county's adjusted net tax
capacity.

A county's aid under this
paragraph may not be less than zero.

(b) In 2006, a county is eligible to receive
two-thirds of the transition aid it received in 2005.

(c) In 2007,For 2009 and each year thereafter, a county
is eligible to receive one-third of the transition aid it received in 2005
2007.

(d) No county shall receive aid under this
subdivision after 2007.

(b) In 2009 only, a county with (1) a 2006
population less than 30,000, and (2) an average Part I crimes per capita
greater than 3.9 percent based on factors used in determining county program
aid payable in 2008, shall receive $100,000.

EFFECTIVE DATE.This section is
effective for aids payable in 2009 and thereafter.

Subd. 8. City
formula aid.(a) In calendar year 2009, the formula aid for a city is
equal to the sum of (1) its city jobs base, (2) its small city aid base, and
(3) the need increase percentage multiplied by its unmet need.

(b) In calendar year 2004 2010 and
subsequent years, the formula aid for a city is equal to the need increase
percentage multiplied by the difference between (1) the city's revenue need
multiplied by its population, and (2) the sum of the city's net tax capacity
multiplied by the tax effort rate. the sum of (1) its city jobs base,
(2) its small city aid base, and (3) the need increase percentage multiplied by
the average of its unmet need for the most recently available two years.

No city may have a formula
aid amount less than zero. The need increase percentage must be the same for
all cities.

The applicable need increase percentage must be
calculated by the Department of Revenue so that the total of the aid under
subdivision 9 equals the total amount available for aid under section 477A.03 after
the subtraction under section 477A.014, subdivisions 4 and 5. For aids
payable in 2009 only, all data used in calculating aid to cities under sections
477A.011 to 477A.013 will be based on the data available for calculating aid to
cities for aids payable in 2008. For aids payable in 2010 and thereafter, data
used in calculating aids to cities under sections 477A.011 to 477A.013 shall be
the most recently available data as of January 1 in the year in which the aid
is calculated.

EFFECTIVE DATE.This section is
effective for aids payable in calendar year 2009 and thereafter, provided that
the appropriation increase for aids payable in 2009 under section 477A.03,
subdivision 2a, goes into effect.

Subd. 9. City
aid distribution. (a) In calendar year 2009 and thereafter, each
city shall receive an aid distribution equal to the sum of (1) the city formula
aid under subdivision 8, and (2) its city aid base, and (3) one-half
of the difference between its total aid in the previous year under this
subdivision and its city aid base in the previous year.

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(b) For aids
payable in 2010 and thereafter, each city shall receive an aid distribution
equal to (1) the city aid formula under subdivision 8, (2) its city aid base,
and (3) its formula aid under subdivision 8 in the previous year, prior to any
adjustments under this subdivision 2009 only, the total aid for any city
shall not exceed the sum of (1) 35 percent of the city's net levy for the year
prior to the aid distribution, plus (2) its total aid in the previous year.

(c) For aids payable in 2009
2010 and thereafter, the total aid for any city shall not exceed the sum of
(1) ten percent of the city's net levy for the year prior to the aid
distribution plus (2) its total aid in the previous year. For aids payable in
2009 and thereafter, the total aid for any city with a population of 2,500 or
more may not be less than its total aid under this section in the previous year
minus the lesser of $15 $10 multiplied by its population, or ten
percent of its net levy in the year prior to the aid distribution.

(d) For aids payable in 20092010 and thereafter, the total aid for a city with a population less
than 2,500 must not be less than the amount it was certified to receive in the
previous year minus the lesser of $15 $10 multiplied by its
population, or five percent of its 2003 certified aid amount. For aids
payable in 2009 only, the total aid for a city with a population less than
2,500 must not be less than what it received under this section in the previous
year unless its total aid in calendar year 2008 was aid under section 477A.011,
subdivision 36, paragraph (s), in which case its minimum aid is zero.

(e) A city's aid loss
under this section may not exceed $300,000 in any year in which the total city
aid appropriation under section 477A.03, subdivision 2a, is equal or greater
than the appropriation under that subdivision in the previous year, unless the
city has an adjustment in its city net tax capacity under the process described
in section 469.174, subdivision 28.

(f) If a city's net tax capacity
used in calculating aid under this section has decreased in any year by more
than 25 percent from its net tax capacity in the previous year due to property
becoming tax-exempt Indian land, the city's maximum allowed aid increase under
paragraph (c) shall be increased by an amount equal to (1) the city's tax rate
in the year of the aid calculation, multiplied by (2) the amount of its net tax
capacity decrease resulting from the property becoming tax exempt.

EFFECTIVE DATE.This section is
effective for aids payable in calendar year 2009 and thereafter, provided that
the appropriation increase for aids payable in 2009 under section 477A.03,
subdivision 2a, goes into effect.

Sec. 9. Minnesota Statutes
2006, section 477A.03, is amended to read:

477A.03 APPROPRIATION.

Subd. 2. Annual appropriation. A sum sufficient
to discharge the duties imposed by sections 477A.011 to 477A.014 is annually
appropriated from the general fund to the commissioner of revenue.

Subd. 2a. Cities. For aids payable in 2004
2009 and thereafter, the total aids aid paid under section
477A.013, subdivision 9, are limited to $429,000,000 is $526,148,487,
subject to adjustment in subdivision 5. For aids payable in 2005, the
total aids paid under section 477A.013, subdivision 9, are limited to
$437,052,000. For aids payable in 2006 and thereafter, the total aids paid
under section 477A.013, subdivision 9, is limited to $485,052,000.

Subd. 2b. Counties. (a) For aids payable in
calendar year 2005 and thereafter, the total aids paid to counties under
section 477A.0124, subdivision 3, are limited to $100,500,000. For aids
payable in 2009 and thereafter, the total aid payable under section 477A.0124,
subdivision 3, is $111,500,000 minus one-half of the total aid amount
determined under section 477A.0124, subdivision 5, paragraph (b), subject to
adjustment in subdivision 5. Each calendar year, $500,000 shall be retained
by the commissioner of revenue to make reimbursements to the commissioner of
finance for payments made under section 611.27. For calendar year 2004, the
amount shall be in addition to the payments authorized under section 477A.0124,
subdivision 1. For calendar year 2005 and

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subsequent years,
the amount shall be deducted from the appropriation under this paragraph. The
reimbursements shall be to defray the additional costs associated with
court-ordered counsel under section 611.27. Any retained amounts not used for
reimbursement in a year shall be included in the next distribution of county
need aid that is certified to the county auditors for the purpose of property
tax reduction for the next taxes payable year.

(b) For aids payable in 2005
2009 and thereafter, the total aids aid under section
477A.0124, subdivision 4, are limited to $105,000,000 is $116,132,923
minus one-half of the total aid amount determined under section 477A.0124,
subdivision 5, paragraph (b), subject to adjustment in subdivision 5. For
aids payable in 2006 and thereafter, the total aid under section 477A.0124,
subdivision 4, is limited to $105,132,923. The commissioner of finance
shall bill the commissioner of revenue for the cost of preparation of local
impact notes as required by section 3.987, not to exceed $207,000 in fiscal
year 2004 and thereafter. The commissioner of education shall bill the
commissioner of revenue for the cost of preparation of local impact notes for
school districts as required by section 3.987, not to exceed $7,000 in fiscal
year 2004 and thereafter. The commissioner of revenue shall deduct the amounts
billed under this paragraph from the appropriation under this paragraph. The
amounts deducted are appropriated to the commissioner of finance and the
commissioner of education for the preparation of local impact notes.

Subd. 5.Aid adjustments.For aids payable in 2010, the aid
amounts contained in subdivisions 2a and 2b are increased by two percent. For
aids payable in 2011 and thereafter, the aids amounts contained in subdivisions
2a and 2b are equal to 104 percent of the amounts for aids payable in 2010
under this section.

EFFECTIVE DATE.This section is
effective for aids payable in calendar year 2009 and thereafter.

Sec. 10. [477A.16] UTILITY VALUATION TRANSITION
AID.

Subdivision 1.Definitions.(a) When used in this section, the following
terms have the meanings indicated in this subdivision.

(b) "Local unit"
means a home rule charter or statutory city, or a town.

(c) "Old rule utility
net tax capacity" means the net tax capacity of all public utility
property within the local unit's taxing jurisdiction for assessment year 2007,
calculated as if the property were valued under valuation rules in effect prior
to assessment year 2007.

(d) "New rule utility
net tax capacity" means the net tax capacity of all public utility
property within the local unit's taxing jurisdiction for assessment year 2007,
calculated as if the property were valued under valuation rules in effect for
assessment year 2007, but without the phase-in provisions of Minnesota Rules,
part 8100.0800.

(e) "Modified net tax
capacity" means the local unit's net tax capacity for taxes payable in
2008, modified by substituting the old rule utility net tax capacity for the
actual net tax capacity of utility property. Modified net tax capacity must be
determined by the commissioner of revenue based on information and data
available to the commissioner as of July 1, 2008.

(f) "Net tax capacity
differential" means the positive difference, if any, by which the local
unit's old rule utility net tax capacity exceeds its new rule utility net tax
capacity.

(g) "Current year net
tax capacity differential" means the positive difference, if any, by which
the local unit's old rule utility net tax capacity exceeds its total tax
capacity of utility property for taxes payable in the current year.

Subd. 2.Aid eligibility; payment.(a) If the net tax capacity
differential of the local unit exceeds four percent of its modified net tax
capacity, the local unit is eligible for transition aid computed under
paragraphs (b) and (c).

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(b) For aids
payable in 2009, transition aid under this section for an eligible local unit
equals 50 percent of (1) the net tax capacity differential, times (2) the
jurisdiction's tax rate for taxes payable in 2008.

(c) For aids payable in 2010 and thereafter,
transition aid under this section for an eligible local unit equals (1) the
current year net tax capacity differential for taxes payable in the year
preceding the aid distribution year, times (2) the jurisdiction's tax rate for
taxes payable in 2008.

(c) The commissioner of revenue shall compute the
amount of transition aid payable to each local unit under this section. On or
before August 1 of each year, the commissioner shall certify the amount of
transition aid computed for aids payable in the following year for each
recipient local unit. The commissioner shall pay transition aid to local units
annually at the times provided in section 477A.015.

Subd. 3.Appropriation.An amount sufficient to pay transition aid under this section is annually
appropriated to the commissioner of revenue from the general fund.

EFFECTIVE DATE.This section is
effective for aids payable in 2009 and thereafter.

Sec. 11. STATE
PARKS LOCATED ON LAKE VERMILION; DISTRIBUTION OF PAYMENTS IN LIEU OF TAXES.

(a) Notwithstanding Minnesota Statutes, section
477A.14, payments in lieu of taxation under Minnesota Statutes, sections
477A.11 to 477A.145, for the land included in any state park located in whole
or in part on the shores of Lake Vermilion must be distributed to the taxing
jurisdictions containing the property as follows: one-third to the school
district, one-third to the township, and one-third to the county. Each of those
taxing jurisdictions may use the payments for their general purposes.

(b) Notwithstanding Minnesota Statutes, section 477A.11,
the payments for all lands described in paragraph (a) must be made at the rate
set for acquired natural resources land.

Sec. 12. STUDY
OF AIDS TO LOCAL GOVERNMENTS.

The chairs of the senate and house of
representatives committees with jurisdiction over taxes shall each appoint five
members to a study group of the tax committees to examine the current system of
aids to local governments and make recommendations on improvements to the
system. Of the five members appointed by each chair, two must be members of the
tax committee, one of whom is a majority party member and one of whom is a
minority party member. The remaining members must represent local units of
government. The chairs of the divisions of the tax committees having
jurisdiction over property taxes shall also be members and shall serve as
cochairs of the study group. The study shall include, but not be limited to,
consideration of existing disparities in the distribution of local government
aid, an analysis of current law need and capacity factors as well as
alternative need factors, alternative analytical methods for determining
correlations between factors and need, the formula used to calculate aid for
small cities, and volatility in the local government aid distribution. The
group must report on its specific recommendations to the legislature by
December 15, 2010.

EFFECTIVE DATE.This section is
effective the day following final enactment.

Sec. 13. OUT-OF-HOME
PLACEMENT AID.

In calendar year 2009 only, $500,000 shall be
distributed to any county in which (1) the 2006 estimated population exceeds
30,000, and (2) the 2006 percentage of households receiving food stamps exceeds
15 percent, based on data used in computing county program aids for aids
payable in 2008 and the 2006 estimated household

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count according
to the state demographer. The aid must be used to meet the county's cost of
out-of-home placement programs. $500,000 is appropriated to the commissioner of
revenue from the general fund to make the payment authorized under this
section. The payment must be made prior to June 30, 2009.

EFFECTIVE DATE.This section is
effective the day following final enactment.

Subd. 5. Special levies. "Special
levies" means those portions of ad valorem taxes levied by a local
governmental unit for the following purposes or in the following manner:

(1) to pay the costs of the
principal and interest on bonded indebtedness or to reimburse for the amount of
liquor store revenues used to pay the principal and interest due on municipal
liquor store bonds in the year preceding the year for which the levy limit is
calculated;

(2) to pay the costs of
principal and interest on certificates of indebtedness issued for any corporate
purpose except for the following:

(ii) certificates of indebtedness
issued under sections 298.28 and 298.282;

(iii) certificates of
indebtedness used to fund current expenses or to pay the costs of extraordinary
expenditures that result from a public emergency; or

(iv) certificates of
indebtedness used to fund an insufficiency in tax receipts or an insufficiency
in other revenue sources;

(3) to provide for the
bonded indebtedness portion of payments made to another political subdivision
of the state of Minnesota;

(4) to fund payments made to
the Minnesota State Armory Building Commission under section 193.145,
subdivision 2, to retire the principal and interest on armory construction
bonds;

(5) property taxes approved
by voters which are levied against the referendum market value as provided
under section 275.61;

(6) to fund matching
requirements needed to qualify for federal or state grants or programs to the
extent that either (i) the matching requirement exceeds the matching
requirement in calendar year 2001, or (ii) it is a new matching requirement
that did not exist prior to 2002;

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(7) to pay the
expenses reasonably and necessarily incurred in preparing for or repairing the
effects of natural disaster including the occurrence or threat of widespread or
severe damage, injury, or loss of life or property resulting from natural
causes, in accordance with standards formulated by the Emergency Services
Division of the state Department of Public Safety, as allowed by the
commissioner of revenue under section 275.74, subdivision 2;

(8) pay amounts required to correct an error in the
levy certified to the county auditor by a city or county in a levy year, but
only to the extent that when added to the preceding year's levy it is not in
excess of an applicable statutory, special law or charter limitation, or the
limitation imposed on the governmental subdivision by sections 275.70 to 275.74
in the preceding levy year;

(9) to pay an abatement under section 469.1815;

(10) to pay any costs attributable to increases in
the employer contribution rates under chapter 353, or locally administered
pension plans, that are effective after June 30, 2001;

(11) to pay the operating or maintenance costs of a
county jail as authorized in section 641.01 or 641.262, or of a correctional
facility as defined in section 241.021, subdivision 1, paragraph (f), to the
extent that the county can demonstrate to the commissioner of revenue that the
amount has been included in the county budget as a direct result of a rule,
minimum requirement, minimum standard, or directive of the Department of
Corrections, or to pay the operating or maintenance costs of a regional jail as
authorized in section 641.262. For purposes of this clause, a district court
order is not a rule, minimum requirement, minimum standard, or directive of the
Department of Corrections. If the county utilizes this special levy, except to
pay operating or maintenance costs of a new regional jail facility under
sections 641.262 to 641.264 which will not replace an existing jail facility,
any amount levied by the county in the previous levy year for the purposes
specified under this clause and included in the county's previous year's levy
limitation computed under section 275.71, shall be deducted from the levy limit
base under section 275.71, subdivision 2, when determining the county's current
year levy limitation. The county shall provide the necessary information to the
commissioner of revenue for making this determination;

(12) to pay for operation of a lake improvement
district, as authorized under section 103B.555. If the county utilizes this
special levy, any amount levied by the county in the previous levy year for the
purposes specified under this clause and included in the county's previous
year's levy limitation computed under section 275.71 shall be deducted from the
levy limit base under section 275.71, subdivision 2, when determining the
county's current year levy limitation. The county shall provide the necessary
information to the commissioner of revenue for making this determination;

(13) to repay a state or federal loan used to fund
the direct or indirect required spending by the local government due to a state
or federal transportation project or other state or federal capital project.
This authority may only be used if the project is not a local government
initiative;

(14) to pay for court administration costs as
required under section 273.1398, subdivision 4b, less the (i) county's share of
transferred fines and fees collected by the district courts in the county for
calendar year 2001 and (ii) the aid amount certified to be paid to the county
in 2004 under section 273.1398, subdivision 4c; however, for taxes levied to
pay for these costs in the year in which the court financing is transferred to
the state, the amount under this clause is limited to the amount of aid the
county is certified to receive under section 273.1398, subdivision 4a;

(15) to fund a police or firefighters relief
association as required under section 69.77 to the extent that the required
amount exceeds the amount levied for this purpose in 2001;

(16) for purposes of a storm sewer improvement
district under section 444.20; and

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(17) to pay for the
maintenance and support of a city or county society for the prevention of
cruelty to animals under section 343.11. If the city or county uses this
special levy, any amount levied by the city or county in the previous levy year
for the purposes specified in this clause and included in the city's or
county's previous year's levy limit computed under section 275.71, must be
deducted from the levy limit base under section 275.71, subdivision 2, in
determining the city's or county's current year levy limit.;

(18) for counties, to pay for the increase in their
share of health and human service costs caused by reductions in federal health
and human services grants effective after September 30, 2007;

(19) for a city, for the costs reasonably and necessarily
incurred for securing, maintaining, or demolishing foreclosed or abandoned
residential properties, as allowed by the commissioner of revenue under section
275.74, subdivision 2. A city must have either (i) a foreclosure rate of at
least 1.4 percent in 2007, or (ii) a foreclosure rate in 2007 in the city or in
a zip code area of the city that is at least 50 percent higher than the average
foreclosure rate in the metropolitan area, as defined in Minnesota Statutes
section 473.121, subdivision 2, to use this special levy. For purposes of this
paragraph, "foreclosure rate" means the number of foreclosures, as
indicated by sheriff sales records, divided by the number of households in the
city in 2007;

(20) for a city, for the unreimbursed costs of redeployed
traffic control agents and lost traffic citation revenue due to the collapse of
the Interstate 35W bridge, as certified to the Federal Highway Administration;

(21) to pay costs attributable to wages and benefits
for sheriff, police, and fire personnel. If a local governmental unit did not
use this special levy in the previous year its levy limit base under section
275.71 shall be reduced by the amount equal to the amount it levied for the
purposes specified in this clause in the previous year; and

(22) an amount equal to any reductions in the
certified aids or credits payable under sections 477A.011 to 477A.014, and
section 273.1384, due to unallotment under section 16A.152. The amount of the
levy allowed under this clause is equal to the amount unallotted in the
calendar year in which the tax is levied unless the unallotment amount is not
known by September 1 of the levy year, in which case the unallotment amount may
be levied in the following year.

EFFECTIVE DATE.This section is
effective for taxes levied in calendar year 2008 and thereafter, payable in
2009 and thereafter.

Subd. 6.Levy aid
base."Levy aid base" for a local governmental unit for a
levy year means its total levy spread on net tax capacity, minus any amounts
that would qualify as a special levy under section 275.70, plus the sum of (1)
the total amount of aids and reimbursements that the local governmental unit is
certified to receive under sections 477A.011 to 477A.014 in the same year, (2)
taconite aids under sections 298.28 and 298.282 in the same year, including any
aid which was required to be placed in a special fund for expenditure in the
next succeeding year, and (3) payments to the local governmental unit under
section 272.029 in the same year, adjusted for any error in estimation in the
preceding year.

EFFECTIVE DATE.This section is
effective for levies certified in calendar year 2008, payable in calendar year
2009 and thereafter.

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Sec. 3. Minnesota
Statutes 2006, section 275.71, is amended to read:

275.71 LEVY LIMITS.

Subdivision 1. Limit
on levies. Notwithstanding any other provision of law or municipal charter
to the contrary which authorize ad valorem taxes in excess of the limits
established by sections 275.70 to 275.74, the provisions of this section apply
to local governmental units for all purposes other than those for which special
levies and special assessments are made.

Subd. 2. Levy
limit base.(a) The levy limit base for a local governmental unit
for taxes levied in 2003 is equal to its adjusted levy limit base in the
previous year, subject to any adjustments under section 275.72, plus any aid
amounts received in 2003 under section 273.138 or 273.166, minus the difference
between its levy limit under subdivision 5 for taxes levied in 2002 and the
amount it actually levied under that subdivision in that year, and certified
property tax replacement aid payable in 2003 under section 174.242. 2008
is its levy aid base from the previous year, subject to any adjustments under
section 275.72. For taxes levied in 2009 and 2010, the levy limit base for a
local governmental unit is its adjusted levy limit base in the previous year,
subject to any adjustments under section 275.72.

Subd. 3.Adjustments
for state takeovers.(a) The levy limit base for each local unit of
government shall be adjusted to reflect the assumption by the state of
financing for certain government functions as indicated in this subdivision.

(b) For a county in a judicial district for which
financing has not been transferred to the state by January 1, 2001, the levy
limit base for 2001 is permanently reduced by the amount of the county's 2001
budget for court administration costs, as certified under section 273.1398,
subdivision 4b, paragraph (b), net of the county's share of transferred fines
and fees collected by the district courts in the county for the same budget
period.

(c) For a governmental unit which levied a tax in
2000 under section 473.388, subdivision 7, the levy limit base for 2001 is
permanently reduced by an amount equal to the sum of the governmental unit's
taxes payable 2001 nondebt transit services levy plus the portion of its 2001
homestead and agricultural credit aid under section 273.1398, subdivision 2,
attributable to nondebt transit services.

(d) For counties in a judicial district in which the
state assumed financing of mandated services costs as defined in section
480.181, subdivision 4, on July 1, 2001, the levy limit base for taxes levied
in 2001 is permanently reduced by an amount equal to one-half of the aid
reduction under section 273.1398, subdivision 4a, paragraph (g).

Subd. 4. Adjusted
levy limit base.(a) For taxes levied in 2003 2008 through
2010, the adjusted levy limit base is equal to the levy limit base computed
under subdivisions 2 and 3 subdivision 2 or section 275.72,
reduced by 40 percent of the difference between (1) the sum of 2003 certified
aid payments, under sections 273.138, 273.1398 except for amounts certified
under subdivision 4a, paragraph (b), 273.166, 477A.011 to 477A.03, 477A.06, and
477A.07, before any reduction under Laws 2003, First Special Session chapter
21, articles 5 and 6, and (2) the sum of the aids paid in 2004 under those same
sections, after any reductions in 2004 under Laws 2003, First Special Session
chapter 21, articles 5 and 6. multiplied by:

(1) one plus the lessor of 3.9 percent or the
percentage growth in the implicit price deflator;

(2) one plus a percentage equal to 50 percent of the
percentage increase in the number of households, if any, for the most recent
12-month period for which data is available; and

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(3) one plus a
percentage equal to 50 percent of the percentage increase in the taxable market
value of the jurisdiction due to new construction of class 3 property, as defined
in section 273.13, subdivision 4, except for state-assessed utility and
railroad property, for the most recent year for which data is available.

(b) For taxes levied in 2003 only, the adjusted levy
limit base is increased by 60 percent of the difference between a
jurisdiction's market value credit in 2003 before any reductions under Laws
2003, First Special Session chapter 21, articles 5 and 6, and its market value
credit in 2004 after reductions in Laws 2003, First Special Session chapter 21,
articles 5 and 6.

Subd. 5. Property
tax levy limit. For taxes levied in 2003 2008 through 2010,
the property tax levy limit for a local governmental unit is equal to its
adjusted levy limit base determined under subdivision 4 plus any additional
levy authorized under section 275.73, which is levied against net tax capacity,
reduced by the sum of (i) the total amount of aids and reimbursements that the
local governmental unit is certified to receive under sections 477A.011 to
477A.014, except for the increases in city aid bases in calendar year 2002
under section 477A.011, subdivision 36, paragraphs (l), (n), and (o), (ii)
homestead and agricultural aids it is certified to receive under section
273.1398, (iii) (ii) taconite aids under sections 298.28 and 298.282
including any aid which was required to be placed in a special fund for
expenditure in the next succeeding year, (iv) temporary court aid under
section 273.1398, subdivision 4a, and (v) (iii) estimated payments
to the local governmental unit under section 272.029, adjusted for any error in
estimation in the preceding year, and (iv) aids under section 477A.16.

Subd. 6. Levies
in excess of levy limits. If the levy made by a city or county exceeds the
levy limit provided in sections 275.70 to 275.74, except when the excess levy
is due to the rounding of the rate in accordance with section 275.28, the
county auditor shall only extend the amount of taxes permitted under sections
275.70 to 275.74, as provided for in section 275.16.

EFFECTIVE DATE.This section is
effective for levies certified in calendar years 2008 through 2010, payable in
2009 through 2011.

Subd. 2. Authorization
for special levies.(a) A local governmental unit may request
authorization to levy for unreimbursed costs for natural disasters under
section 275.70, subdivision 5, clause (7). The local governmental unit shall
submit a request to levy under section 275.70, subdivision 5, clause (7), to
the commissioner of revenue by September 30 of the levy year and the request
must include information documenting the estimated unreimbursed costs. The
commissioner of revenue may grant levy authority, up to the amount requested
based on the documentation submitted. All decisions of the commissioner are
final.

(b) A city may request authorization to levy for
reasonable and necessary costs for securing, maintaining, or demolishing
foreclosed or abandoned residential properties under section 275.70,
subdivision 5, clause (19). The local governmental unit shall submit a request
to levy under section 275.70, subdivision 5, clause (19), to the commissioner
of revenue by September 30 of the levy year and the request must include
information documenting the estimated costs. For taxes payable in 2009, the
amount may include unanticipated costs incurred above the amount budgeted for
these purposes in 2008. Costs of securing foreclosed or abandoned residential
properties include payment for police and fire department services. The
commissioner of revenue may grant levy authority, up to the lesser of (1) the
amount requested based on the documentation submitted, or (2) $3,000 multiplied
by the number of foreclosed residential properties, as defined by sheriff sales
records, in calendar year 2007. All decisions of the commissioner are final.

EFFECTIVE DATE.This section is
effective for levies certified in 2008 through 2010, payable in 2009 through
2011.

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Notwithstanding any law to
the contrary, all maintenance of effort and matching fund requirements for
counties, including, but not limited to, those under sections 116L.872,
119B.11, 134.34, 145A.131, 145.882, 242.39, 245.4835, 245.714, 254B.02,
254B.03, 256B.0625, 256F.10, and 256F.13, are suspended for the taxes payable
years that levy limits are in effect.

Subd. 2. Corporate franchise and mining company
taxes. Corporations or mining companies shall receive an extension of seven
months or the amount of time granted by the Internal Revenue Service,
whichever is longer, for filing the return of a corporation subject to tax
under chapter 290 or for filing the return of a mining company subject to tax
under sections 298.01 and 298.015. Interest on any balance of tax not paid when
the regularly required return is due must be paid at the rate specified in
section 270C.40, from the date such payment should have been made if no
extension was granted, until the date of payment of such tax.

If a corporation or mining
company does not:

(1) pay at least 90 percent
of the amount of tax shown on the return on or before the regular due date of
the return, the penalty prescribed by section 289A.60, subdivision 1, shall be
imposed on the unpaid balance of tax; or

(2) pay the balance due
shown on the regularly required return on or before the extended due date of
the return, the penalty prescribed by section 289A.60, subdivision 1, shall be
imposed on the unpaid balance of tax from the original due date of the return.

EFFECTIVE DATE.This section is
effective the day following final enactment and applies to any federal
extension that allows filing after that date.

Subd. 7.Federal extensions.When an extension of time to file a
partnership or S corporation tax return is granted by the Internal Revenue
Service, the commissioner shall grant an automatic extension to file the
comparable Minnesota return for that period. An extension granted under this
subdivision does not affect the due date for making payments of tax.

EFFECTIVE DATE.This section is
effective the day following final enactment and applies to any federal
extension that allows filing after that date.

Subd. 6b. Foreign operating corporation. The term
"foreign operating corporation," when applied to a corporation, means
a domestic corporation with the following characteristics:

(1) it is part of a unitary
business at least one member of which is taxable in this state;

(2) it is not a foreign
sales corporation under section 922 of the Internal Revenue Code, as amended
through December 31, 1999, for the taxable year;

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(3) it is not an
interest charge domestic international sales corporation under sections 992,
993, 994, and 995 of the Internal Revenue Code;

(4) either (i) the average of the percentages of its
property and payrolls, including the pro rata share of its unitary
partnerships' property and payrolls, assigned to locations outside the United
States, where the United States includes the District of Columbia and excludes
the commonwealth of Puerto Rico and possessions of the United States, as
determined under section 290.191 or 290.20, is 80 percent or more; or (ii)
it has in effect a valid election under section 936 of the Internal Revenue
Code; or (ii) at least 80 percent of the gross income from all sources of
the corporation in the tax year is active foreign business income; and

(4) it has $1,000,000 of payroll and $2,000,000 of
property, as determined under section 290.191 or 290.20, that are located
outside the United States. If the domestic corporation does not have payroll as
determined under section 290.191 or 290.20, but it or its partnerships have
paid $1,000,000 for work, performed directly for the domestic corporation or
the partnerships, outside the United States, then paragraph (3)(i) shall not
require payrolls to be included in the average calculation

(5) for purposes of this subdivision, active foreign
business income means gross income that is (i) derived from sources without the
United States, as defined in subtitle A, chapter 1, subchapter N, part 1, of
the Internal Revenue Code; and (ii) attributable to the active conduct of a
trade or business in a foreign country.

EFFECTIVE DATE.This section is
effective for taxable years beginning after December 31, 2007.

Subd. 19b. Subtractions
from federal taxable income. For individuals, estates, and trusts, there
shall be subtracted from federal taxable income:

(1) net interest income on obligations of any
authority, commission, or instrumentality of the United States to the extent
includable in taxable income for federal income tax purposes but exempt from
state income tax under the laws of the United States;

(2) if included in federal taxable income, the
amount of any overpayment of income tax to Minnesota or to any other state, for
any previous taxable year, whether the amount is received as a refund or as a
credit to another taxable year's income tax liability;

(3) the amount paid to others, less the amount used
to claim the credit allowed under section 290.0674, not to exceed $1,625 for
each qualifying child in grades kindergarten to 6 and $2,500 for each qualifying
child in grades 7 to 12, for tuition, textbooks, and transportation of each
qualifying child in attending an elementary or secondary school situated in
Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a resident
of this state may legally fulfill the state's compulsory attendance laws, which
is not operated for profit, and which adheres to the provisions of the Civil
Rights Act of 1964 and chapter 363A. For the purposes of this clause,
"tuition" includes fees or tuition as defined in section 290.0674,
subdivision 1, clause (1). As used in this clause, "textbooks"
includes books and other instructional materials and equipment purchased or
leased for use in elementary and secondary schools in teaching only those
subjects legally and commonly taught in public elementary and secondary schools
in this state. Equipment expenses qualifying for deduction includes expenses as
defined and limited in section 290.0674, subdivision 1, clause (3).
"Textbooks" does not include instructional books and materials used
in the teaching of religious tenets, doctrines, or worship, the purpose of
which is to instill such tenets, doctrines, or worship, nor does it include
books or materials for, or transportation to, extracurricular activities
including sporting events, musical or dramatic events, speech activities,
driver's education, or similar programs. For purposes of the subtraction
provided by this clause, "qualifying child" has the meaning given in
section 32(c)(3) of the Internal Revenue Code;

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(4) income as
provided under section 290.0802;

(5) to the extent included
in federal adjusted gross income, income realized on disposition of property
exempt from tax under section 290.491;

(6) to the extent not
deducted or not deductible pursuant to section 408(d)(8)(E) of the Internal
Revenue Code in determining federal taxable income by an individual who does
not itemize deductions for federal income tax purposes for the taxable year, an
amount equal to 50 percent of the excess of charitable contributions over $500
allowable as a deduction for the taxable year under section 170(a) of the
Internal Revenue Code and under the provisions of Public Law 109-1;

(7) for taxable years beginning
before January 1, 2008, the amount of the federal small ethanol producer credit
allowed under section 40(a)(3) of the Internal Revenue Code which is included
in gross income under section 87 of the Internal Revenue Code;

(8) for individuals who are allowed
a federal foreign tax credit for taxes that do not qualify for a credit under
section 290.06, subdivision 22, an amount equal to the carryover of subnational
foreign taxes for the taxable year, but not to exceed the total subnational
foreign taxes reported in claiming the foreign tax credit. For purposes of this
clause, "federal foreign tax credit" means the credit allowed under
section 27 of the Internal Revenue Code, and "carryover of subnational
foreign taxes" equals the carryover allowed under section 904(c) of the
Internal Revenue Code minus national level foreign taxes to the extent they
exceed the federal foreign tax credit;

(9) in each of the five tax
years immediately following the tax year in which an addition is required under
subdivision 19a, clause (7), or 19c, clause (15), in the case of a shareholder
of a corporation that is an S corporation, an amount equal to one-fifth of the
delayed depreciation. For purposes of this clause, "delayed
depreciation" means the amount of the addition made by the taxpayer under
subdivision 19a, clause (7), or subdivision 19c, clause (15), in the case of a
shareholder of an S corporation, minus the positive value of any net operating
loss under section 172 of the Internal Revenue Code generated for the tax year
of the addition. The resulting delayed depreciation cannot be less than zero;

(10) job opportunity
building zone income as provided under section 469.316;

(11) to the extent included
in federal taxable income, the amount of compensation paid to members of the
Minnesota National Guard or other reserve components of the United States
military for active service performed in Minnesota, excluding compensation for
services performed under the Active Guard Reserve (AGR) program. For purposes
of this clause, "active service" means (i) state active service as
defined in section 190.05, subdivision 5a, clause (1); (ii) federally funded
state active service as defined in section 190.05, subdivision 5b; or (iii)
federal active service as defined in section 190.05, subdivision 5c, but
"active service" excludes services performed exclusively for
purposes of basic combat training, advanced individual training, annual
training, and periodic inactive duty training; special training periodically
made available to reserve members; and service performed in accordance with
section 190.08, subdivision 3;

(12) to the extent included
in federal taxable income, the amount of compensation paid to Minnesota
residents who are members of the armed forces of the United States or United
Nations for active duty performed outside Minnesota under United States Code,
title 10, section 101(d); United States Code, title 32, section 101(12); or the
authority of the United Nations;

(13) an amount, not to
exceed $10,000, equal to qualified expenses related to a qualified donor's
donation, while living, of one or more of the qualified donor's organs to
another person for human organ transplantation. For purposes of this clause,
"organ" means all or part of an individual's liver, pancreas, kidney,
intestine, lung, or bone marrow; "human organ transplantation" means
the medical procedure by which transfer of a human organ is made

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from the body of
one person to the body of another person; "qualified expenses" means
unreimbursed expenses for both the individual and the qualified donor for (i)
travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such
expenses may be subtracted under this clause only once; and "qualified
donor" means the individual or the individual's dependent, as defined in
section 152 of the Internal Revenue Code. An individual may claim the
subtraction in this clause for each instance of organ donation for transplantation
during the taxable year in which the qualified expenses occur;

(14) in each of the five tax
years immediately following the tax year in which an addition is required under
subdivision 19a, clause (8), or 19c, clause (16), in the case of a shareholder
of a corporation that is an S corporation, an amount equal to one-fifth of the
addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause
(16), in the case of a shareholder of a corporation that is an S corporation,
minus the positive value of any net operating loss under section 172 of the
Internal Revenue Code generated for the tax year of the addition. If the net
operating loss exceeds the addition for the tax year, a subtraction is not
allowed under this clause;

(15) to the extent included
in federal taxable income, compensation paid to a nonresident who is a
service member as defined in United States Code, title 10, section 101(a)(5),
for military service as defined in the Service Member Civil Relief Act, Public
Law 108-189, section 101(2); and

(16) international economic
development zone income as provided under section 469.325; and

(17) to the extent included
in federal taxable income, the amount of national service educational awards
received from the National Service Trust under United States Code, title 42,
sections 12601 to 12604, for service in an approved Americorps National Service
program.

EFFECTIVE DATE.This section is
effective for tax years beginning after December 31, 2008, except clause (17)
is effective for tax years beginning after December 31, 2007.

(1) the amount of any
deduction taken for federal income tax purposes for income, excise, or
franchise taxes based on net income or related minimum taxes, including but not
limited to the tax imposed under section 290.0922, paid by the corporation to
Minnesota, another state, a political subdivision of another state, the
District of Columbia, or any foreign country or possession of the United
States;

(2) interest not subject to
federal tax upon obligations of: the United States, its possessions, its
agencies, or its instrumentalities; the state of Minnesota or any other state,
any of its political or governmental subdivisions, any of its municipalities,
or any of its governmental agencies or instrumentalities; the District of
Columbia; or Indian tribal governments;

(3) exempt-interest
dividends received as defined in section 852(b)(5) of the Internal Revenue
Code;

(4) the amount of any net
operating loss deduction taken for federal income tax purposes under section
172 or 832(c)(10) of the Internal Revenue Code or operations loss deduction
under section 810 of the Internal Revenue Code;

(5) the amount of any
special deductions taken for federal income tax purposes under sections 241 to
247 and 965 of the Internal Revenue Code;

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(6) losses from the
business of mining, as defined in section 290.05, subdivision 1, clause (a),
that are not subject to Minnesota income tax;

(7) the amount of any capital losses deducted for
federal income tax purposes under sections 1211 and 1212 of the Internal
Revenue Code;

(8) the exempt foreign trade income of a foreign
sales corporation under sections 921(a) and 291 of the Internal Revenue Code;

(9) the amount of percentage depletion deducted
under sections 611 through 614 and 291 of the Internal Revenue Code;

(10) for certified pollution control facilities
placed in service in a taxable year beginning before December 31, 1986, and for
which amortization deductions were elected under section 169 of the Internal
Revenue Code of 1954, as amended through December 31, 1985, the amount of the
amortization deduction allowed in computing federal taxable income for those
facilities;

(11) the amount of any deemed dividend from a
foreign operating corporation determined pursuant to section 290.17,
subdivision 4, paragraph (g). The deemed dividend shall be reduced by the
amount of the addition to income required by clauses (20), (21), (22), and (23);

(12) the amount of a partner's pro rata share of net
income which does not flow through to the partner because the partnership
elected to pay the tax on the income under section 6242(a)(2) of the Internal
Revenue Code;

(13) the amount of net income excluded under section
114 of the Internal Revenue Code;

(14) any increase in subpart F income, as defined in
section 952(a) of the Internal Revenue Code, for the taxable year when subpart
F income is calculated without regard to the provisions of section 103 of
Public Law 109-222;

(15) 80 percent of the depreciation deduction
allowed under section 168(k)(1)(A) and (k)(4)(A) of the Internal Revenue Code.
For purposes of this clause, if the taxpayer has an activity that in the
taxable year generates a deduction for depreciation under section 168(k)(1)(A)
and (k)(4)(A) and the activity generates a loss for the taxable year that the
taxpayer is not allowed to claim for the taxable year, "the depreciation
allowed under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is
limited to excess of the depreciation claimed by the activity under section
168(k)(1)(A) and (k)(4)(A) over the amount of the loss from the activity that
is not allowed in the taxable year. In succeeding taxable years when the losses
not allowed in the taxable year are allowed, the depreciation under section
168(k)(1)(A) and (k)(4)(A) is allowed;

(16) 80 percent of the amount by which the deduction
allowed by section 179 of the Internal Revenue Code exceeds the deduction
allowable by section 179 of the Internal Revenue Code of 1986, as amended
through December 31, 2003;

(17) to the extent deducted in computing federal
taxable income, the amount of the deduction allowable under section 199 of the
Internal Revenue Code;

(18) the exclusion allowed under section 139A of the
Internal Revenue Code for federal subsidies for prescription drug plans; and

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(20) an amount
equal to the interest and intangible expenses, losses, and costs paid, accrued,
or incurred by any member of the taxpayer's unitary group to or for the benefit
of a corporation that is a member of the taxpayer's unitary business group that
qualifies as a foreign operating corporation. For purposes of this clause,
intangible expenses and costs include:

(i) expenses, losses, and costs for, or related to,
the direct or indirect acquisition, use, maintenance or management, ownership,
sale, exchange, or any other disposition of intangible property;

This clause does not apply
to any item of interest or intangible expenses or costs paid, accrued, or
incurred, directly or indirectly, to a foreign operating corporation with respect
to such item of income to the extent that the income to the foreign operating
corporation is income from sources without the United States as defined in
subtitle A, chapter 1, subchapter N, part 1, of the Internal Revenue Code;

(21) except as already included in the taxpayer's
taxable income pursuant to clause (20), any interest income and income
generated from intangible property received or accrued by a foreign operating
corporation that is a member of the taxpayer's unitary group. For purposes of
this clause, income generated from intangible property includes:

(i) income related to the direct or indirect
acquisition, use, maintenance or management, ownership, sale, exchange, or any
other disposition of intangible property;

This clause does not apply
to any item of interest or intangible income received or accrued by a foreign
operating corporation with respect to such item of income to the extent that
the income is income from sources without the United States as defined in
subtitle A, chapter 1, subchapter N, part 1, of the Internal Revenue Code;

(22) the dividends attributable to the income of a
foreign operating corporation that is a member of the taxpayer's unitary group
in an amount that is equal to the dividends paid deduction of a real estate
investment trust under section 561(a) of the Internal Revenue Code for amounts
paid or accrued by the real estate investment trust to the foreign operating
corporation; and

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(23) the income
of a foreign operating corporation that is a member of the taxpayer's unitary
group in an amount that is equal to gains derived from the sale of real or
personal property located in the United States.

EFFECTIVE DATE.This section is
effective for taxable years beginning after December 31, 2007.

Subd. 19d. Corporations;
modifications decreasing federal taxable income. For corporations, there
shall be subtracted from federal taxable income after the increases provided in
subdivision 19c:

(1) the amount of foreign dividend gross-up added to
gross income for federal income tax purposes under section 78 of the Internal
Revenue Code;

(2) the amount of salary expense not allowed for
federal income tax purposes due to claiming the work opportunity credit under
section 51 of the Internal Revenue Code;

(3) any dividend (not including any distribution in
liquidation) paid within the taxable year by a national or state bank to the
United States, or to any instrumentality of the United States exempt from
federal income taxes, on the preferred stock of the bank owned by the United
States or the instrumentality;

(4) amounts disallowed for intangible drilling costs
due to differences between this chapter and the Internal Revenue Code in
taxable years beginning before January 1, 1987, as follows:

(i) to the extent the disallowed costs are
represented by physical property, an amount equal to the allowance for
depreciation under Minnesota Statutes 1986, section 290.09, subdivision 7,
subject to the modifications contained in subdivision 19e; and

(ii) to the extent the disallowed costs are not
represented by physical property, an amount equal to the allowance for cost depletion
under Minnesota Statutes 1986, section 290.09, subdivision 8;

(5) the deduction for capital losses pursuant to
sections 1211 and 1212 of the Internal Revenue Code, except that:

(i) for capital losses incurred in taxable years
beginning after December 31, 1986, capital loss carrybacks shall not be
allowed;

(ii) for capital losses incurred in taxable years
beginning after December 31, 1986, a capital loss carryover to each of the 15
taxable years succeeding the loss year shall be allowed;

(iii) for capital losses incurred in taxable years
beginning before January 1, 1987, a capital loss carryback to each of the three
taxable years preceding the loss year, subject to the provisions of Minnesota
Statutes 1986, section 290.16, shall be allowed; and

(iv) for capital losses incurred in taxable years
beginning before January 1, 1987, a capital loss carryover to each of the five
taxable years succeeding the loss year to the extent such loss was not used in a
prior taxable year and subject to the provisions of Minnesota Statutes 1986,
section 290.16, shall be allowed;

(6) an amount for interest and expenses relating to
income not taxable for federal income tax purposes, if (i) the income is
taxable under this chapter and (ii) the interest and expenses were disallowed
as deductions under the provisions of section 171(a)(2), 265 or 291 of the
Internal Revenue Code in computing federal taxable income;

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(7) in the case of
mines, oil and gas wells, other natural deposits, and timber for which
percentage depletion was disallowed pursuant to subdivision 19c, clause (9), a
reasonable allowance for depletion based on actual cost. In the case of leases
the deduction must be apportioned between the lessor and lessee in accordance
with rules prescribed by the commissioner. In the case of property held in
trust, the allowable deduction must be apportioned between the income
beneficiaries and the trustee in accordance with the pertinent provisions of
the trust, or if there is no provision in the instrument, on the basis of the
trust's income allocable to each;

(8) for certified pollution control facilities
placed in service in a taxable year beginning before December 31, 1986, and for
which amortization deductions were elected under section 169 of the Internal
Revenue Code of 1954, as amended through December 31, 1985, an amount equal to
the allowance for depreciation under Minnesota Statutes 1986, section 290.09,
subdivision 7;

(9) amounts included in federal taxable income that
are due to refunds of income, excise, or franchise taxes based on net income or
related minimum taxes paid by the corporation to Minnesota, another state, a
political subdivision of another state, the District of Columbia, or a foreign
country or possession of the United States to the extent that the taxes were
added to federal taxable income under section 290.01, subdivision 19c, clause
(1), in a prior taxable year;

(10) 80 percent of royalties, fees, or other like
income accrued or received from a foreign operating corporation or a foreign
corporation which is part of the same unitary business as the receiving
corporation, unless the income resulting from such payments or accruals is
income from sources within the United States as defined in subtitle A, chapter
1, subchapter N, part 1, of the Internal Revenue Code;

(11) income or gains from the business of mining as
defined in section 290.05, subdivision 1, clause (a), that are not subject to
Minnesota franchise tax;

(12) the amount of disability access expenditures in
the taxable year which are not allowed to be deducted or capitalized under
section 44(d)(7) of the Internal Revenue Code;

(13) the amount of qualified research expenses not
allowed for federal income tax purposes under section 280C(c) of the Internal
Revenue Code, but only to the extent that the amount exceeds the amount of the
credit allowed under section 290.068;

(14) the amount of salary expenses not allowed for
federal income tax purposes due to claiming the Indian employment credit under
section 45A(a) of the Internal Revenue Code;

(15) for taxable years beginning before January 1,
2008, the amount of the federal small ethanol producer credit allowed under
section 40(a)(3) of the Internal Revenue Code which is included in gross income
under section 87 of the Internal Revenue Code;

(16) for a corporation whose foreign sales
corporation, as defined in section 922 of the Internal Revenue Code, constituted
a foreign operating corporation during any taxable year ending before January
1, 1995, and a return was filed by August 15, 1996, claiming the deduction
under section 290.21, subdivision 4, for income received from the foreign
operating corporation, an amount equal to 1.23 multiplied by the amount of
income excluded under section 114 of the Internal Revenue Code, provided the
income is not income of a foreign operating company;

(17) any decrease in subpart F income, as defined in
section 952(a) of the Internal Revenue Code, for the taxable year when subpart
F income is calculated without regard to the provisions of section 103 of
Public Law 109-222;

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(16) (18) in each of the five tax
years immediately following the tax year in which an addition is required under
subdivision 19c, clause (15), an amount equal to one-fifth of the delayed
depreciation. For purposes of this clause, "delayed depreciation"
means the amount of the addition made by the taxpayer under subdivision 19c,
clause (15). The resulting delayed depreciation cannot be less than zero; and

(17) (19) in each of the five tax
years immediately following the tax year in which an addition is required under
subdivision 19c, clause (16), an amount equal to one-fifth of the amount of the
addition.

EFFECTIVE DATE.This section is
effective for taxable years beginning after December 31, 2007.

Subd. 33. Bovine testing credit. (a) An owner of
cattle in Minnesota may take a credit against the tax due under this chapter
for an amount equal to: (1) for corporate filers, including shareholders of
an "S" corporation under section 290.9725, 25 percent of the expenses
incurred during the taxable year to conduct tuberculosis testing on those
cattle; and (2) for all other filers, one-half the expenses incurred during
the taxable year to conduct tuberculosis testing on those cattle.

(b) If the amount of credit
which the taxpayer is eligible to receive under this subdivision exceeds the
taxpayer's tax liability under this chapter, the commissioner of revenue shall
refund the excess to the taxpayer.

(c) The amount necessary to
pay claims for the refund provided in this subdivision is appropriated from the
general fund to the commissioner of revenue.

(d) Expenses incurred in a
calendar year in which tuberculosis testing of cattle in Minnesota is not
federally required are not allowed in claiming the credit under paragraph (a).

EFFECTIVE DATE.This section is
effective for taxable years beginning after December 31, 2008.

Subdivision 1. Credit allowed; current military service.
(a) An individual is allowed a credit against the tax due under this
chapter equal to $59 for each month or portion thereof that the individual was
in active military service in a designated area after September 11, 2001, and
before January 1, 2009, while a Minnesota domiciliary.

(b) An individual is
allowed a credit against the tax due under this chapter equal to $120 for each
month or portion thereof that the individual was in active military service in
a designated area after December 31, 2008, while a Minnesota domiciliary.

(c) For active service performed
after September 11, 2001, and before December 31, 2006, the individual may
claim the credit in the taxable year beginning after December 31, 2005, and
before January 1, 2007.

(c)(d) For active
service performed after December 31, 2006, the individual may claim the credit
for the taxable year in which the active service was performed.

(d)(e) If an individual
entitled to the credit died prior to January 1, 2006, the individual's estate
or heirs at law, if the individual's probate estate has closed or the estate
was not probated, may claim the credit.

EFFECTIVE DATE.This section is
effective for taxable years beginning after December 31, 2008.

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Subd. 1a.Credit
allowed; past military service.(a) A qualified individual is
allowed a credit against the tax imposed under this chapter for past military
service. The credit equals $750. The credit allowed under this subdivision is
reduced by 10 percent of adjusted gross income in excess of $30,000, but in no
case is the credit less than zero.

(b) For a nonresident or a part-year resident, the
credit under this subdivision must be allocated based on the percentage
calculated under section 290.06, subdivision 2c, paragraph (e).

EFFECTIVE DATE.This section is
effective for taxable years beginning after December 31, 2008.

Subd. 3. Credit
refundable. If the amount of credit which the individual is eligible to
receive under this section subdivision 1 exceeds the individual's
tax liability under this chapter, the commissioner shall refund the excess to
the individual.

EFFECTIVE DATE.This section is
effective for taxable years beginning after December 31, 2008.

(i) the charitable contribution deduction under
section 170 of the Internal Revenue Code:;

(A) for taxable years beginning before January 1,
2006, to the extent that the deduction exceeds 1.0 percent of adjusted gross
income;

(B) for taxable years beginning after December 31,
2005, to the full extent of the deduction.

For purposes of this clause, "adjusted gross
income" has the meaning given in section 62 of the Internal Revenue Code;

(ii) the medical expense deduction;

(iii) the casualty, theft, and disaster loss
deduction; and

(iv) the impairment-related work expenses of a
disabled person;

(3) for depletion allowances computed under section
613A(c) of the Internal Revenue Code, with respect to each property (as defined
in section 614 of the Internal Revenue Code), to the extent not included in
federal alternative minimum taxable income, the excess of the deduction for
depletion allowable under section 611 of the Internal Revenue Code for the
taxable year over the adjusted basis of the property at the end of the taxable
year (determined without regard to the depletion deduction for the taxable
year);

(4) to the extent not included in federal
alternative minimum taxable income, the amount of the tax preference for intangible
drilling cost under section 57(a)(2) of the Internal Revenue Code determined
without regard to subparagraph (E);

(5) to the extent not included in federal
alternative minimum taxable income, the amount of interest income as provided
by section 290.01, subdivision 19a, clause (1); and

(2) an overpayment of state income tax as provided
by section 290.01, subdivision 19b, clause (2), to the extent included in
federal alternative minimum taxable income;

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(3) the amount of
investment interest paid or accrued within the taxable year on indebtedness to
the extent that the amount does not exceed net investment income, as defined in
section 163(d)(4) of the Internal Revenue Code. Interest does not include
amounts deducted in computing federal adjusted gross income; and

(4) amounts subtracted from
federal taxable income as provided by section 290.01, subdivision 19b, clauses (6)
and (9) to (16).

In the case of an estate or
trust, alternative minimum taxable income must be computed as provided in
section 59(c) of the Internal Revenue Code.

(d) "Regular tax"
means the tax that would be imposed under this chapter (without regard to this
section and section 290.032), reduced by the sum of the nonrefundable credits
allowed under this chapter.

(e) "Net minimum
tax" means the minimum tax imposed by this section.

EFFECTIVE DATE.This section is
effective for taxable years beginning after December 31, 2007.

Subd. 5. Determination of sales factor. For
purposes of this section, the following rules apply in determining the sales
factor.

(a) The sales factor
includes all sales, gross earnings, or receipts received in the ordinary course
of the business, except that the following types of income are not included in
the sales factor:

(1) interest;

(2) dividends;

(3) sales of capital assets
as defined in section 1221 of the Internal Revenue Code;

(4) sales of property used
in the trade or business, except sales of leased property of a type which is
regularly sold as well as leased;

(5) sales of debt
instruments as defined in section 1275(a)(1) of the Internal Revenue Code or
sales of stock; and

(6) royalties, fees, or
other like income of a type which qualify for a subtraction from federal
taxable income under section 290.01, subdivision 19d(10).

(b) Sales of tangible
personal property are made within this state if the property is received by a
purchaser at a point within this state, and the taxpayer is taxable in this
state, regardless of the f.o.b. point, other conditions of the sale, or the
ultimate destination of the property.

(c) Tangible personal
property delivered to a common or contract carrier or foreign vessel for
delivery to a purchaser in another state or nation is a sale in that state or
nation, regardless of f.o.b. point or other conditions of the sale.

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(d) Notwithstanding
paragraphs (b) and (c), when intoxicating liquor, wine, fermented malt
beverages, cigarettes, or tobacco products are sold to a purchaser who is
licensed by a state or political subdivision to resell this property only
within the state of ultimate destination, the sale is made in that state.

(e) Sales made by or through
a corporation that is qualified as a domestic international sales corporation
under section 992 of the Internal Revenue Code are not considered to have been
made within this state.

(f) Sales, rents, royalties,
and other income in connection with real property is attributed to the state in
which the property is located.

(g) Receipts from the lease
or rental of tangible personal property, including finance leases and true
leases, must be attributed to this state if the property is located in this
state and to other states if the property is not located in this state.
Receipts from the lease or rental of moving property including, but not limited
to, motor vehicles, rolling stock, aircraft, vessels, or mobile equipment are
included in the numerator of the receipts factor to the extent that the
property is used in this state. The extent of the use of moving property is
determined as follows:

(1) A motor vehicle is used
wholly in the state in which it is registered.

(2) The extent that rolling
stock is used in this state is determined by multiplying the receipts from the
lease or rental of the rolling stock by a fraction, the numerator of which is
the miles traveled within this state by the leased or rented rolling stock and
the denominator of which is the total miles traveled by the leased or rented
rolling stock.

(3) The extent that an
aircraft is used in this state is determined by multiplying the receipts from
the lease or rental of the aircraft by a fraction, the numerator of which is
the number of landings of the aircraft in this state and the denominator of
which is the total number of landings of the aircraft.

(4) The extent that a
vessel, mobile equipment, or other mobile property is used in the state is
determined by multiplying the receipts from the lease or rental of the property
by a fraction, the numerator of which is the number of days during the taxable
year the property was in this state and the denominator of which is the total
days in the taxable year.

(h) Royalties and other
income not described in paragraph (a), clause (6), received for the use of or
for the privilege of using intangible property, including patents, know-how,
formulas, designs, processes, patterns, copyrights, trade names, service names,
franchises, licenses, contracts, customer lists, or similar items, must be
attributed to the state in which the property is used by the purchaser. If the
property is used in more than one state, the royalties or other income must be
apportioned to this state pro rata according to the portion of use in this
state. If the portion of use in this state cannot be determined, the royalties
or other income must be excluded from both the numerator and the denominator.
Intangible property is used in this state if the purchaser uses the intangible
property or the rights therein in the regular course of its business operations
in this state, regardless of the location of the purchaser's customers.

(i) Sales of intangible
property are made within the state in which the property is used by the
purchaser. If the property is used in more than one state, the sales must be
apportioned to this state pro rata according to the portion of use in this
state. If the portion of use in this state cannot be determined, the sale must
be excluded from both the numerator and the denominator of the sales factor.
Intangible property is used in this state if the purchaser used the intangible
property in the regular course of its business operations in this state.

(j) Receipts from the
performance of services must be attributed to the state where the services are
received. For the purposes of this section, receipts from the performance of
services provided to a corporation, partnership, or trust may only be
attributed to a state where it has a fixed place of doing business. If the
state where the services are received is not readily determinable or is a state
where the corporation, partnership, or trust receiving the service

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does not have a
fixed place of doing business, the services shall be deemed to be received at
the location of the office of the customer from which the services were ordered
in the regular course of the customer's trade or business. If the ordering
office cannot be determined, the services shall be deemed to be received at the
office of the customer to which the services are billed.

(k) For the purposes of this subdivision and
subdivision 6, paragraph (l), receipts from management, distribution, or
administrative services performed by a corporation or trust for a fund of a
corporation or trust regulated under United States Code, title 15, sections
80a-1 through 80a-64, must be attributed to the state where the shareholder of
the fund resides. Under this paragraph, receipts for services attributed to
shareholders are determined on the basis of the ratio of: (1) the average of
the outstanding shares in the fund owned by shareholders residing within
Minnesota at the beginning and end of each year; and (2) the average of the
total number of outstanding shares in the fund at the beginning and end of each
year. Residence of the shareholder, in the case of an individual, is determined
by the mailing address furnished by the shareholder to the fund. Residence of
the shareholder, when the shares are held by an insurance company as a
depositor for the insurance company policyholders, is the mailing address of
the policyholders. In the case of an insurance company holding the shares as a
depositor for the insurance company policyholders, if the mailing address of
the policyholders cannot be determined by the taxpayer, the receipts must be
excluded from both the numerator and denominator. Residence of other
shareholders is the mailing address of the shareholder.

EFFECTIVE DATE.This section is
effective for taxable years beginning after December 31, 2009.

Subd. 6. Determination
of receipts factor for financial institutions. (a) For purposes of this
section, the rules in this subdivision and subdivisionsubdivisions
5, paragraph (k), and 8 apply in determining the receipts factor for
financial institutions.

(b) "Receipts" for this purpose means
gross income, including net taxable gain on disposition of assets, including
securities and money market instruments, when derived from transactions and
activities in the regular course of the taxpayer's trade or business.

(c) "Money market instruments" means
federal funds sold and securities purchased under agreements to resell,
commercial paper, banker's acceptances, and purchased certificates of deposit
and similar instruments to the extent that the instruments are reflected as
assets under generally accepted accounting principles.

(d) "Securities" means United States
Treasury securities, obligations of United States government agencies and
corporations, obligations of state and political subdivisions, corporate stock,
bonds, and other securities, participations in securities backed by mortgages
held by United States or state government agencies, loan-backed securities and
similar investments to the extent the investments are reflected as assets under
generally accepted accounting principles.

(e) Receipts from the lease or rental of real or
tangible personal property, including both finance leases and true leases, must
be attributed to this state if the property is located in this state. Receipts
from the lease or rental of tangible personal property that is
characteristically moving property, including, but not limited to, motor
vehicles, rolling stock, aircraft, vessels, or mobile equipment are included in
the numerator of the receipts factor to the extent that the property is used in
this state. The extent of the use of moving property is determined as follows:

(1) A motor vehicle is used wholly in the state in
which it is registered.

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(2) The extent that
rolling stock is used in this state is determined by multiplying the receipts
from the lease or rental of the rolling stock by a fraction, the numerator of
which is the miles traveled within this state by the leased or rented rolling
stock and the denominator of which is the total miles traveled by the leased or
rented rolling stock.

(3) The extent that an aircraft is used in this
state is determined by multiplying the receipts from the lease or rental of the
aircraft by a fraction, the numerator of which is the number of landings of the
aircraft in this state and the denominator of which is the total number of
landings of the aircraft.

(4) The extent that a vessel, mobile equipment, or
other mobile property is used in the state is determined by multiplying the
receipts from the lease or rental of property by a fraction, the numerator of
which is the number of days during the taxable year the property was in this
state and the denominator of which is the total days in the taxable year.

(f) Interest income and other receipts from assets
in the nature of loans that are secured primarily by real estate or tangible
personal property must be attributed to this state if the security property is
located in this state under the principles stated in paragraph (e).

(g) Interest income and other receipts from consumer
loans not secured by real or tangible personal property that are made to
residents of this state, whether at a place of business, by traveling loan
officer, by mail, by telephone or other electronic means, must be attributed to
this state.

(h) Interest income and other receipts from
commercial loans and installment obligations that are unsecured by real or
tangible personal property or secured by intangible property must be attributed
to this state if the proceeds of the loan are to be applied in this state. If
it cannot be determined where the funds are to be applied, the income and receipts
are attributed to the state in which the office of the borrower from which the
application would be made in the regular course of business is located. If this
cannot be determined, the transaction is disregarded in the apportionment
formula.

(i) Interest income and other receipts from a
participating financial institution's portion of participation and syndication
loans must be attributed under paragraphs (e) to (h). A participation loan is
an arrangement in which a lender makes a loan to a borrower and then sells,
assigns, or otherwise transfers all or a part of the loan to a purchasing
financial institution. A syndication loan is a loan transaction involving
multiple financial institutions in which all the lenders are named as parties
to the loan documentation, are known to the borrower, and have privity of
contract with the borrower.

(j) Interest income and other receipts including
service charges from financial institution credit card and travel and
entertainment credit card receivables and credit card holders' fees must be
attributed to the state to which the card charges and fees are regularly
billed.

(k) Merchant discount income derived from financial
institution credit card holder transactions with a merchant must be attributed
to the state in which the merchant is located. In the case of merchants located
within and outside the state, only receipts from merchant discounts
attributable to sales made from locations within the state are attributed to
this state. It is presumed, subject to rebuttal, that the location of a
merchant is the address shown on the invoice submitted by the merchant to the
taxpayer.

(l) Receipts from the performance of fiduciary and
other services must be attributed to the state in which the services are
received. For the purposes of this section, services provided to a corporation,
partnership, or trust must be attributed to a state where it has a fixed place
of doing business. If the state where the services are received is not readily
determinable or is a state where the corporation, partnership, or trust does
not have a fixed place of doing business, the services shall be deemed to be
received at the location of the office of the customer from which the services
were ordered in the regular course of the customer's trade or business. If the
ordering office cannot be determined, the services shall be deemed to be
received at the office of the customer to which the services are billed.

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(m) Receipts from
the issuance of travelers checks and money orders must be attributed to the
state in which the checks and money orders are purchased.

(n) Receipts from investments of a financial
institution in securities and from money market instruments must be apportioned
to this state based on the ratio that total deposits from this state, its
residents, including any business with an office or other place of business in
this state, its political subdivisions, agencies, and instrumentalities bear to
the total deposits from all states, their residents, their political
subdivisions, agencies, and instrumentalities. In the case of an unregulated
financial institution subject to this section, these receipts are apportioned
to this state based on the ratio that its gross business income, excluding such
receipts, earned from sources within this state bears to gross business income,
excluding such receipts, earned from sources within all states. For purposes of
this subdivision, deposits made by this state, its residents, its political
subdivisions, agencies, and instrumentalities must be attributed to this state,
whether or not the deposits are accepted or maintained by the taxpayer at
locations within this state.

(o) A financial institution's interest in property
described in section 290.015, subdivision 3, paragraph (b), is included in the
receipts factor in the same manner as assets in the nature of securities or
money market instruments are included in paragraph (n).

EFFECTIVE DATE.This section is
effective for taxable years beginning after December 31, 2009.

Subdivision 1. Tax
amount.(a) The tax imposed shall be an amount equal to the
proportion of the maximum credit for state death taxes computed under section
2011 of the Internal Revenue Code, as amended through December 31, 2000,
but using Minnesota adjusted taxable estate instead of federal adjusted taxable
estate, as the Minnesota gross estate bears to the value of the federal gross
estate. The tax determined under this paragraph shall not be greater than
the amount computed by applying the rates and brackets under section 2001(c) of
the Internal Revenue Code to the Minnesota adjusted gross estate and
subtracting the federal credit allowed under section 2010 of the Internal
Revenue Code of 1986, as amended through December 31, 2000. For the purposes of
this section, expenses which are deducted for federal income tax purposes under
section 642(g) of the Internal Revenue Code as amended through December 31,
2002, are not allowable in computing the tax under this chapter.

(b) The tax determined under this subdivision must
not be greater than the sum of the following amounts multiplied by a fraction, the
numerator of which is the Minnesota gross estate and the denominator of which
is the federal gross estate:

(1) the rates and brackets under section 2001(c) of
the Internal Revenue Code multiplied by the sum of:

(A) the taxable estate, as defined under section
2051 of the Internal Revenue Code; plus

(B) adjusted taxable gifts, as defined in section
2001(b) of the Internal Revenue Code; less

(2) the amount of tax allowed under section
2001(b)(2) of the Internal Revenue Code; and less

(3) the federal credit allowed under section 2010 of
the Internal Revenue Code.

(c) For purposes of this subdivision, "Internal
Revenue Code" means the Internal Revenue Code of 1986, as amended through
December 31, 2000.

EFFECTIVE DATE.This section is effective
for estates of decedents dying after December 31, 2005.

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Subd. 1a.Expenses disallowed.For the purposes of this section,
expenses which are deducted for federal income tax purposes under section
642(g) of the Internal Revenue Code are not allowable in computing the tax
under this chapter.

EFFECTIVE DATE.This section is effective
for estates of decedents dying after December 31, 2005.

EFFECTIVE DATE. This section is effective for tax years beginning after December 31,
2007, except that clause (11) and the phrase "to the extent included in
federal taxable income," added in clause (12) are effective retroactively
for taxable years beginning after December 31, 2004.

Subdivision 1.Scope.This section establishes rules that businesses
must satisfy to qualify for the seed capital investment credit under section
290.06, subdivision 34, and the commissioner's responsibility for certifying
the qualifying businesses.

Subd. 2.Definitions.(a) For purposes of this section and section
290.06, subdivision 34, the following terms have the meanings given.

(b) "Border city"
means a city qualifying to designate a border city development zone under
section 469.1731.

(c) "Pass-through
entity" means a corporation that for the applicable tax year is treated as
an S corporation or a general partnership, limited partnership, limited
liability partnership, trust, or limited liability company and which for the
applicable taxable year is not taxed as a corporation under chapter 290.

(d) "Primary sector
business" means a qualified business that through the employment of
knowledge or labor adds value to a product, process, or service and increases
revenues to a Minnesota business generated by sales of products or services to
customers outside of the state or increases revenues to a qualified business
the customers of which previously were unable to acquire, or had limited
availability of the product or service from a Minnesota provider.

(e) "Qualified
business" means a business certified by the commissioner as meeting the
requirements of subdivision 3.

Subd. 3.Qualified business.(a) The commissioner shall certify
whether a business that has requested to become a qualified business meets the
requirements of paragraph (b).

(b) For purposes of this
section, a qualified business must be a primary sector business, other than a
real estate investment trust, that:

(1) is incorporated or its
satellite operation is incorporated as a for-profit corporation or is a
partnership, limited partnership, limited liability company, limited liability
partnership, or joint venture;

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(2) is in
compliance with the requirements for filings with the commissioner of commerce
under the securities laws of this state;

(3) has Minnesota residents as a majority of its employees
in its principal office or the satellite operation, which is located in a
border city;

(4) has its principal office in a border city and
has the majority of its business activity performed in a border city, except
sales activity, or has a significant operation in a border city that has or is
projected to have more than ten employees or $150,000 of sales annually; and

(5) relies on innovation, research, or the
development of new products and processes in its plans for growth and
profitability.

(d) A qualified business may apply to the
commissioner for a recertification. Only one recertification is available to a
qualified business. The application for recertification must be filed with the
commissioner within 90 days before the original certification expiration date.
The recertification issued by the director must comply with the provisions of
paragraph (e).

(e) The commissioner shall issue a certification
letter to a business the commissioner determines is a qualified business. The
certification letter must include:

(1) the certification effective date; and

(2) the certification expiration date, which may not
be more than four years from the certification effective date.

Subd. 4.Seed
capital investment credit reporting.Within 30 days after the date
that an investment in a qualified business is purchased, the qualified business
shall file with the commissioner and the commissioner of revenue and provide to
the investor completed forms prescribed by the commissioner of revenue that
show as to each investment in the qualified business the following:

(1) the name, address, and Social Security number of
the taxpayer who made the investment; and

(2) the dollar amount paid for the investment by the
taxpayer.

EFFECTIVE DATE.This section is
effective the day following final enactment.

Subd. 3. Business
subsidy. "Business subsidy" or "subsidy" means a state
or local government agency grant, contribution of personal property, real
property, infrastructure, the principal amount of a loan at rates below those
commercially available to the recipient, any reduction or deferral of any tax
or any fee, any guarantee of any payment under any loan, lease, or other
obligation, or any preferential use of government facilities given to a
business.

The following forms of financial assistance are not
a business subsidy:

(1) a business subsidy of less than $25,000
$150,000;

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(2) assistance that
is generally available to all businesses or to a general class of similar
businesses, such as a line of business, size, location, or similar general
criteria;

(3) public improvements to buildings or lands owned
by the state or local government that serve a public purpose and do not
principally benefit a single business or defined group of businesses at the
time the improvements are made;

(5) assistance provided for the sole purpose of
renovating old or decaying building stock or bringing it up to code and
assistance provided for designated historic preservation districts, provided
that the assistance is equal to or less than 50 percent of the total cost;

(6) assistance to provide job readiness and training
services if the sole purpose of the assistance is to provide those services;

(7) assistance for housing;

(8) assistance for pollution control or abatement,
including assistance for a tax increment financing hazardous substance
subdistrict as defined under section 469.174, subdivision 23;

(14) funds from bonds allocated under chapter 474A,
bonds issued to refund outstanding bonds, and bonds issued for the benefit of
an organization described in section 501(c)(3) of the Internal Revenue Code of
1986, as amended through December 31, 1999;

(15) assistance for a collaboration between a
Minnesota higher education institution and a business;

Subd. 2. Developing
a set of criteria. A business subsidy may not be granted until the grantor
has adopted criteria after a public hearing for awarding business subsidies
that comply with this section. The criteria may not be adopted on a
case-by-case basis. The criteria must set specific minimum requirements that
recipients must meet in order to be eligible to receive business subsidies. The
criteria must include a specific wage floor for the wages to be paid for the
jobs created. The wage floor may be stated as a specific dollar amount or may
be stated as a formula that will generate a specific dollar amount. A grantor
may deviate from its criteria by documenting in writing the reason for the
deviation and attaching a copy of the document to its next annual report to the
department. The commissioner of employment and economic development may assist
local government agencies in developing criteria. A copy of the criteria must
be submitted to the Department of Employment and Economic Development along
with the first annual report following the enactment of this section or with
the first annual report after it has adopted criteria, whichever is earlier. Notwithstanding
section 116J.993, subdivision 3, clauses (1) and (21), for the purpose of this
subdivision, "business subsidies" as defined under section 116J.993
includes the following forms of financial assistance:

Subd. 5. Public
notice and hearing. (a) Before granting a business subsidy that exceeds
$500,000 for a state government grantor and $100,000$150,000 for
a local government grantor, the grantor must provide public notice and a
hearing on the subsidy. A public hearing and notice under this subdivision is
not required if a hearing and notice on the subsidy is otherwise required by
law.

(b) Public notice of a proposed business subsidy
under this subdivision by a state government grantor, other than the Iron Range
Resources and Rehabilitation Board, must be published in the State Register.
Public notice of a proposed business subsidy under this subdivision by a local
government grantor or the Iron Range Resources and Rehabilitation Board must be
published in a local newspaper of general circulation. The public notice must
identify the location at which information about the business subsidy,
including a summary of the terms of the subsidy, is available. Published notice
should be sufficiently conspicuous in size and placement to distinguish the
notice from the surrounding text. The grantor must make the information
available in printed paper copies and, if possible, on the Internet. The
government agency must provide at least a ten-day notice for the public
hearing.

(c) The public notice must include the date, time,
and place of the hearing.

(d) The public hearing by a state government grantor
other than the Iron Range Resources and Rehabilitation Board must be held in
St. Paul.

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(e) If more than
one nonstate grantor provides a business subsidy to the same recipient, the
nonstate grantors may designate one nonstate grantor to hold a single public
hearing regarding the business subsidies provided by all nonstate grantors. For
the purposes of this paragraph, "nonstate grantor" includes the iron
range resources and rehabilitation board.

(f) The public notice of any public meeting about a
business subsidy agreement, including those required by this subdivision and by
subdivision 4, must include notice that a person with residence in or the owner
of taxable property in the granting jurisdiction may file a written complaint
with the grantor if the grantor fails to comply with sections 116J.993 to
116J.995, and that no action may be filed against the grantor for the failure
to comply unless a written complaint is filed.

Subd. 8. Reports
by grantors. (a) Local government agencies of a local government with a
population of more than 2,500 and state government agencies, regardless of
whether or not they have awarded any business subsidies, must file a report by
April 1 of each year with the commissioner. Local government agencies of a
local government with a population of 2,500 or less are exempt from filing this
report if they have not awarded a business subsidy in the past five years. The
report must include a list of recipients that did not complete the recipient
report required under subdivision 7 and a list of recipients that have not met
their job and wage goals within two years and the steps being taken to bring
them into compliance or to recoup the subsidy.

If the commissioner has not received the report by
April 1 from an entity required to report, the commissioner shall issue a
warning to the government agency. If the commissioner has still not received
the report by June 1 of that same year from an entity required to report, then
that government agency may not award any business subsidies until the report
has been filed.

(b) The report required under paragraph (a) is
also required for financial assistance of $25,000 and greater that is excluded
from the definition of "business subsidy" by section 116J.993,
subdivision 3, clause (1), and of $75,000 and greater that is excluded from the
definition of "business subsidy" by section 116J.993, subdivision 3,
clause (21). The report for the financial assistance under this paragraph must
be completed within one year of the granting of the financial assistance. The
report required for financial assistance under this paragraph must include:

(1) the name of the recipient, its organizational
structure, its address and contact information, and its industry sector;

(2) a description of the amount and use of the
financial assistance and the total project budget, including a list of all
financial assistance by all grantors for the project and the private sources of
financial assistance;

(3) the public purpose of the financial assistance,
the job goals associated with both the financial assistance and the total
project in which the financial assistance is included, the hourly wage of each
job created, and the cost of health insurance provided by the employer;

(4) the date the project will be completed;

(5) the name and address of the parent corporation
of the recipient, if any; and

(6) any other information the commissioner may
request.

(c) Within one year of completing a report under
paragraph (b), the local government agency must report to the commissioner on
progress in achieving the purposes and goals under clause (3).

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(d) The commissioner of
employment and economic development must provide information on reporting
requirements to state and local government agencies.

Subdivision 1. Use of data. (a) Except as provided by
this section, data gathered from any person under the administration of the
Minnesota Unemployment Insurance Law are private data on individuals or
nonpublic data not on individuals as defined in section 13.02, subdivisions 9
and 12, and may not be disclosed except according to a district court order or
section 13.05. A subpoena is not considered a district court order. These data
may be disseminated to and used by the following agencies without the consent
of the subject of the data:

(1) state and federal
agencies specifically authorized access to the data by state or federal law;

(2) any agency of any other
state or any federal agency charged with the administration of an unemployment
insurance program;